On Guard

Transguard MD Mike McGeever talks about its acquisition of MACAir.

How has the downturn affected Transguard?

Growth, while it has been impressive historically, has slowed simply because the size of the marketplace has decreased, and people are taking a little longer to make decisions in terms of their contracting.

Our outlook for the future is very positive. The acquisition is a strong vote of confidence in Dubai and the UAE. We are very bullish about the future. The infrastructure being set up here in Dubai and the UAE in particular includes such notable achievements as the Dubai Metro, and the F1 at Yas Island in in Abu Dhabi, which was superb. So we have every confidence that we will continue to grow into the future.

What was the reasoning behind the acquisition?

MACAir is a considered strategic move. What we have done in FM is decided that, as well as having the soft services, we want to offer the full package – proper FM, self-performing, so we can control quality, efficiency and the expediency. We are very, very keen on making sure that when we have a client we can provide and anticipate everything that they will require.

The acquisition has expanded your market and customer reach?

Clearly it gives us a whole new client base. There is the dichotomy between contracting and maintenance. We are very supportive of the contracting side of MACAir. We have a significant forward order book of about AED550 million on the contracting side. We are bringing in Mike Calender as MD. His remit is to be build the maintenance side, where he has been very successful running a maintenance company for the last ten years, an MEP company in the UK.

FM and MEP are essentially two sides of the same coin?

I think MEP maintenance is a sub-set of FM. I do not think you can be an FM company if you are not able to provide the full package. What we are doing really is making ourselves a supplier of choice to enable us to sit down with our customers and really all sorts of activities. Many MEP companies have aspired to, and some have managed to become, FM companies, particularly in Europe. Similarly, you have single-trick ponies – catering and cleaning companies – moving up the value chain to FM. I think MEP is just another example of this.

I do not think we are in the business of compromising on quality. I do not think you can, particularly with MEP, as health and safety issues are wrapped around it. Very often, particularly with MEP, there are also security issues wrapped around it. I do not think we can cut corners. I do not think Dubai and the UAE want corners to be cut. There is nothing to be gained. Short-termism is inimical to long-term quality.

We are looking at operating lease type of ideas. We are very keen on off balance sheet solutions. My intention is ultimately to be able to put equipment in at our own cost in return for a long-term operating lease, a quasi-EFI type deal.

The MACAir name will be retained?

We see an intrinsic value in the name at this moment in time, simply because of the association it has had with quality in the MEP business over the last ten years. It will be the fourth division within Transguard group. We have already put our mobilisation and transition team into play to allow MACAir and its staff to bridge, hopefully bump-free, into Transguard.

What is your overall growth strategy in terms of growth?

We have been asked by customers in Oman, Bahrain, Qatar, Saudi Arabia and many African countries, as well as India, Pakistan and four European countries, to go and open Transguard internationally. We have not done so because the marketplace in Dubai, and the extraordinary growth we have had since our inception seven years ago, has suggested we are much better off to build on what we have and where we know, and that is across the UAE generally.

We will be moving internationally, and we will be selecting somewhere within the GCC to open first and foremost. Internationally, outside of the GCC, we are in discussions with several organisations about taking on a Transguard franchise. We will supply the knowledge, know-how and, in some instances, the opportunities and leads for the business; they will supply in-country knowledge and infrastructure. So that is a very exciting dimension for us.

Any final message?

I would like to extend a sincere thank you to the historic customers of MACAir and the Transguard group. All of you will understand that change sometimes brings uncertainty – that is not our intention at all in this instance. We would like the customers of MACAir to acknowledge and understand the benefits of the deal. We look forward to servicing them in the future, and introducing MEP to our existing customer base.