CKR reveals expansion plans to the Indian sub-continent
CKR Consulting Engineers has emerged stronger after the downturn, and is looking to expand further to the Indian sub-continent. We speak to some of the company directors.
The South African consultancy has been involved in some of that country’s most prestigious projects. These include the Melrose Arch mixed-use development in Johannesburg in 2001, major extensions to the South African Reserve Bank head office in Pretoria in 2003, the Pan African Parliament development at Gallagher Estate in Johannesburg in 2005, Montecasino in 2000, including the Montecasino East End in 2007, Johannesburg’s largest entertainment resort to date, and the Zimbali Fairmont Hotel & Resort in 2009.
The Dubai consultancy has been involved with some of the emirate’s most iconic projects to date, including the Royal Mirage Resort in 2002, Madinat Jumeirah Resort in 2004, Bab Al Shams Desert Resort & Spa in 2004, Park Hyatt at the creek in 2005, Old Town Island including Souk Al Bahar at the Burj Khalifa precinct in 2007 and the premier Capital Club at DIFC in 2008. Current flagship projects include the St Regis Hotel on Saadiyat Island in Abu Dhabi, the Palm One and Only boutique hotel on The Palm Jumeirah and the Marriott Hotel & Marriott Executive Apartments at Dubai Healthcare City.
This impressive list of projects spans two very different markets. The South African consultancy had been more focused on the electrical and electronics side, whereas the Dubai side is strong on the MEP, ELV and IT side. “The strength of the South African strategy of delivering projects collaboratively has been implemented very successfully here in Dubai,” comments director Anil Menon.
“We have a hands-on, proactive approach with the common goal of delivering a project under budget and on time. We also participate in cost management and assist with procurement, for example, which is generally not a business model adopted by MEP consultants here. Due to this dynamic approach, anything and everything becomes possible,” says Menon.
Director Michael Berry says the Dubai company has always constituted a relatively ‘small’ practice. This is due to the inherent philosophy underpinning the consultancy, by which everyone from the directors down to the draughtsmen “are really intimately involved with projects. Generally we have a director actively involved in each our projects irrespective of the size of the project, keeping abreast of what is happening. In South Africa we were predominantly an electrical and electronics consultancy; here we are a full MEP and electronics services provider.
“We were given an opportunity to come to Dubai to be involved in the Royal Mirage Phase 2 in 2001. Obviously it was a good opening for us as it was just before the boom really took place, so we were well-positioned here at the time. Madinat Jumeirah was another opportunity that came our way during this time, and it developed from there,” says Berry. “We took a conscious decision to adopt the best of both worlds. We decided to combine what is positive from this region with what was positive from South Africa. It was a mix based heavily on strategic and proactive support, so we could undertake a fast-track or a traditional project, from a massive resort to a small residential development. We sort of adapted ourselves to both ends of the market,” says Menon.
“Initially the number of our staff up here was relatively small, and a lot of the projects were being designed with the professional team out of South Africa,” explains director Jeán van Loggerenberg. “So you found the architects, QSs and development team was managing that component of the process from South Africa, and we got involved more from an on ground design and local authority point of view to make sure it complied and make the necessary submissions and so on.
“Over the years that changed as we got to work more with project teams based here in Dubai, as well as the fact that those original clients also established a stronger regional presence and started with full design here. Slowly the design component stopped coming from South Africa, although technically we would still interact due to the two-way flow of information and expertise,” says Van Loggerenberg.
“People became aware of us after Madinat Jumeirah. I do not think we have ever had to actively pursue projects. It was more word of mouth and people inviting us to participate in projects,” says Menon. Mirage Mille Leisure and Development, the master developer of Madinat Jumeirah, became a key client as it expanded its own project base.
“There was a certain element of risk entering the Dubai market at that time,” notes Van Loggerenberg. “You have to remember what was happening in South Africa at that time [mid 1990s to early 2000s]. South Africa had gone through a boom period in terms of entertainment related projects, and there was an element of uncertainty as to what would happen next. So it was a good time to come up here. What has happened in Dubai now is similar to what South Africa went through then, which is why we are now looking to the Indian sub-continent, which is really the next step,” says Van Loggerenberg.
“We are looking at the region positively,” says Menon. “When we came here the Middle East was at the earliest stages of the boom, and looking back it was a good decision to come here. However, there is also an element of risk attached at all times.” The boom period of the mid 2000s saw CKR Consulting Engineers balloon from its initial three directors to 60+ staff in total – however, it has not retrenched a single person with the downturn.
“So there has been growth, but we have also managed to be lean and highly proactive. Our strategy is in being multi-faceted and walking the talk. We are engineers and business strategists all rolled into one. We are able to keep our staff complement at a much lower level than the normal market model,” says Menon.
Commenting on the challenges of setting up operations in Dubai, Van Loggerenberg says: “I think globally our industry [MEP consulting] is small, but here it is a lot smaller, and you are only as good as your last project. You cannot afford to have bad projects, especially here, and I think that is one of the reasons you have got to be careful with what you take on, especially in a boom period.”
“During the boom, we were conscious not to compromise our core principle of quality and high level of service. The way we approached projects was that we would still have one of the directors responsible for each and every project, thereby giving the client the same level of service. It was a conscious decision not to adopt a cookie-cutter project mode where you take on a lot of people whom you then have to fire when the job ends. We have not had to retrench one single person; the company evolved around this growth strategy,” says Menon.
How does one ensure continued growth when only focusing on what is at hand? “I think it is a lot like billiards: you do not play for the current shot, but you position the ball for the next shot. I think from our perspective it was similar. It was to adopt pre-emptive strategies and be positive at all times. You knew it would be good for tomorrow, and still be able to bat for today. That was the way we approached it and dealt with it,” says Menon.
He adds that “the market in Dubai seems to be picking up. Some major developments are starting to raise their heads again. I think it is going to remain slow as it transforms into a more established kind of ongoing market as opposed to the rapid boom period.” Menon says the consultancy’s strategy going forward is to embrace geographical diversification as well as to strengthen its core verticals.
“There have been promising discussions in terms of Qatar and Saudi Arabia. Surprisingly, there have been some requests from the Far East. What will happen is we go over there and there will be cross-pollination between Dubai and those areas. Based on the requirements of the specific projects, we would bolster our support mechanisms accordingly. For example, one of our directors, Mark Conn, has just returned to the South African office to support Stefano Riccardi, our managing director, and will be instrumental in driving MEP in that market,” says Van Loggerenberg. “South Africa is also a base to support Mauritius, the Indian Ocean Islands, the Seychelles and the Maldives.”
Apart from its geographical diversification, the company is also looking to boost its own service offering. “We already have a unique proposition in being an MEP consultant embracing cost management, IT and electronics, but are expanding this in line with client demands, including operational maintenance gap analysis. Energy efficiency/savings and sustainable design are also being added to strengthen our core verticals,” says Menon.
Van Loggerenberg says consultancies must also not be leery of tackling smaller projects. “We are also doing smaller work, such as refurbishments. We have always been doing that, even during the boom times. This is how most consultancies have survived, tackling the big together with the small.”
Menon says the entire MEP market has been affected due to the downturn. “MEP contractors were in the driving seat during the boom time, and actually building rates for volatile commodities into contracts. As the recession hit the market, the clients jumped into the driving seat, and it has gone back to lump-sum contracts, and contractors are really struggling at the moment due to the sharp appreciation in such commodities as copper and steel.”
A consequence of the downturn has been an increased focus on quality and planning. “Developers are under pressure, but are insisting on doing things the proper way by first conducting proper feasibility studies. We are helping with value engineering at the onset rather than cost-cutting at the end, which is far more integrated and sustainable.”
Berry says the impact of the downturn was exaggerated by its precipitousnes. “If only it had been a bit less dramatic, it would have been better for the economy. I think it is due for another correction now. It needs to go up again.” Menon says: “Dubai is a great platform to build on.” And Van Loggerenberg concludes: “Now it is a case of putting a bit of that trust back.”