Back to school
Sammon Group founder and CEO Miceal Sammon speaks to Construction Week
School building presents a huge challenge for even the most experienced of contractors. With its tight schedules for completion and detailed design criteria, a typical construction firm would see a school project as one of the most challenging developments across its portfolio.
But for specialist school builder the Sammon Group, constructing educational infrastructure is simply part of its daily routine. Having focused on this sector since the mid-1990s, the company, which is headquartered in Ireland, has developed a wealth of expertise in this industry and a unique capacity to advise education departments within governments.
Indeed, it was this expert knowledge and experience in the sector that put the Sammon Group in a good enough position to take advantage of Abu Dhabi’s Future School Building Programme.
For founder and CEO Miceál Sammon, winning a third of the Abu Dhabi Education Council (ADEC) project (Phase 1), the equivalent of five main construction contracts and over 93,000m2 worth of schools, was in fact the company’s biggest achievement in 2010.
“To some extent, our focus on school building has been our saviour during this downturn,” Sammon says confidently.
“In any country where they have an economic downturn, governments put money into the education and medical sectors. This is where we have won out – we have grown our business every year, including the last two years during the recession, because we concentrate primarily on educational and social infrastructure.”
Incidentally, the group had already been working in the UAE well before the downturn. Having been observing the UAE education market for some time, in 2006 company executives decided it was time to be part of this market, and risky as it was, made a bold move.
“We chose the UAE because Abu Dhabi has one of the most ambitious roll-out programmes of education buildings in the world. Firstly, we were working in Dubai, where we delivered about 140,000m2 of schools for private educators. We wanted to establish a regional hub, so we decided to set up our UAE and regional office in Abu Dhabi.”
Asked whether the firm, which also has an office in Tripoli, found it difficult to enter the UAE market, Sammon speaks honestly. “It can be difficult to establish yourself in a new market. There needs to be a pipeline of work, and of your specialism particularly. Even for us, it was a challenge, but once we were able to prove our expertise and credentials, we were welcomed. The reality is that if you have the expertise and you are in the right price bracket, you will win the work.”
And yet, although he is excited about the “tremendous amount” of projects coming online in the UAE at the moment, Sammon is also quick to admit that the current competition remains high. “The education sector in this region is attracting a lot more Western and Middle Eastern companies because there are not as many apartments and commercial buildings being built at the moment, and there is obviously a slowdown in the construction industry generally,” he says. “In the future I feel that it is only going to get more competitive.”
In an effort to deal with the competition, however, Sammon asserts that his company has more than one string to its bow. With early experience in interiors and fit-outs, and a portfolio of experience in the medical arena, the group is not only focusing on schools, but is also supplying luxury furniture (via its recently-established joinery workshop) and is currently tendering for a number of medical projects.
Meanwhile, a facilities management (FM) division is also proving to be successful, based on the firm’s long history of maintaining schools and universities.
“We are in a good position to carry out the FM for the schools we build because we understand the intricacies of the buildings upon their completion,” says Sammon.
The problem, he adds, is that the UAE market is not yet in a position to provide many design, build and operate contracts in this sector.
“In truth, we would like to see the market mature to the point where there are more of these contracts coming onto the market. In that way we could deliver a whole package.”
Of course, there is one area where the company is in the running to win a design, build and operate contract, and that is for the ‘villa schools’ projects in Abu Dhabi.
Here the demand for new build is high after ongoing issues related to inadequate safety standards of existing schools forced ADEC to close all 71 villa schools in the region.
Unfortunately, rather than presenting an opportunity for school builders, this issue placed massive pressure on both the public and private sector to build a large number of new schools quickly and efficiently, with limited access to finance due to capped school fees and minimal government funding.
Thus there are a number of long-term contracts to finance and build such schools, so as to accommodate the approximately 45,000 pupils who will be displaced when the existing facilities shut down.
“Of course, I understand the villa school demand,” says Sammon.
“Unfortunately, not all communities have the privilege of going to the top end schools like the ones we are delivering for ADEC at the moment. The good news is that they are going to build villa replacement schools in Mohammed Bin Zayed City and Khalifa bin Zayed City. They have tendered six plots of land for that already, and we are participating. This is part of the Sammon Group strategy going forward. Here we will work on a design, build and operate model, so we will even look after the education aspect.”
Asked how the group plans to finance this move, bearing in mind the capped school fees (which would eventually pay for the construction), Sammon is not slow to respond. “We would have to take a long-term view on investment, and it would have to be part of our business strategy.
What usually happens is that these projects work like public private partnerships, where a group of financiers get involved and we share the risk, and you get paid back over a period of time. You also get a payback which is greater than the initial investment. The downside is that the return on investment takes a number of years.”
On the subject of downsides, many industry players are interested to know how a family business like the Sammon Group has found working on schools in the UAE generally.
“Building the schools is not an issue; that is our everyday job. There can be some difficulties operating in a marketplace where you only work for governments, as the Sammon Group does, but this is across the board.
What I will say is that the bonding requirements can sometimes be onerous in this region, and the contracts can be quite onerous as well.
“The good thing about working for governments is that you are always going to get paid. And the design teams here are very well chosen. ADEC has spent a lot of time selecting them, which makes life much easier during the building phase. The other thing which makes life easier here than in a lot of places is their commitment to carrying out the projects.”
Another question is how Sammon compares his firm to the likes of the Wates and Al Fara’a partnership, which is also known for its focus on the education sector in the region.
“There is not much comparison really; we have different models. They are not specialist school builders; they build schools, but not as a specialist. The Sammon Group actually specialises in school building. They are reputable contractors though, so it is nice to be talked about in the same context.”
Probably a bigger similarity between Sammon and other contractors is a commitment to the region and an intention to expand into other countries.
As well as looking at the UAE market, which includes a plan to build more schools and universities in Sharjah and Dubai, the group is currently looking at establishing an office in Saudi Arabia, and has been invited to tender for school building programmes in Qatar, Kuwait and Oman.
“Probably the biggest challenge for 2011 will be establishing a full-blown Sammon entity in Saudi Arabia. This is mainly due to the large quantity of labour you require. As you can imagine, it can be a logistical nightmare trying to get visas for everyone.
“As a group, however, we are very positive about 2011, because not only in Abu Dhabi, but in other regions, there is a lot happening in education. It will, however, be our intention to focus on Abu Dhabi and Saudi Arabia in this region.”
The Sammon Group is currently in discussion with the government in Saudi Arabia about the Kingdom’s Future Schools Building Programme, which has not commenced yet, but which will be rolled out this year. If a contract is won, it would open up a large number of opportunities for the Sammon Group, with a total requirement of 4,500 schools in the region over the next ten years.
As for Abu Dhabi projects, Sammon says, “At the moment we are bidding on teacher accommodation and other government projects, and on Phase 2 of the Abu Dhabi Future Schools Building Programme. When it comes out in later in the year, we will also be bidding on Phase 3, which involves another 15 schools being built of the same magnitude as Phase 1. We are keeping out fingers crossed.”
Miceál Sammon is the founder, chairman and CEO of the Sammon Group. The family has been involved in the construction industry for over five decades, a heritage which led Sammon to set up his first specialist fit-out and joinery company in Ireland 25 years ago.
This high-end craftsmanship company created specialist products that have been exported worldwide.
The group’s services range from design-and-build construction to project management and asset management and recovery. In 1999 the company successfully completed its first education project in Ireland, and has continued to enjoy an exemplary track record in the delivery of world-class education facilities.
In 2007, the group opened its first international office in the UAE, delivering a number of education facilities in Dubai and Sharjah. The company relocated its MENA head office to Abu Dhabi in 2009, where it successfully secured five schools to be constructed for the Abu Dhabi Education Council.
The group currently has over 140,000m2 of construction on-site in the markets in which it operates.
Sammon Group’s main projects
Top marks for school builder
Dubai Modern High School, Dubai Status: completed
GEMS Millennium School, Sharjah Status: completed
The Winchester School, Silicon Oasis Status: completed
The Winchester School, Jebel Ali Status: completed
Abu Dhabi Future School Building Programme, Phase 1 Status: ongoing
The Abu Dhabi West School project is on track for completion in August 2011, reported construction company Sammon Group during a visit by UAE and Irish dignitaries to the site.
The visit was attended by HE Batt O’Keeffe, Minister for Enterprise, Trade & Innovation, Republic of Ireland; HE Dr. Mugheer Khamis Al-Khaili, Director General of Abu Dhabi Education Council (ADEC); and HE Ciáran Madden, Ambassador of Ireland to the UAE.
The Sammon Group, which has been operating in the UAE for three years, has been awarded five prestigious school projects by ADEC as part of the Abu Dhabi Future School Programme. These projects are located at Al Towaya, Al Jahly and Al Khazna in Al Ain and at Al Khatem and Abu Dhabi West.
These schools, designed to achieve an Estidama 3 Pearl Rating, incorporate sustainability features such as energy-efficient air-con systems, water-conservation devices, PV panels, solar water heating, lighting controls and vertical gardens.
“The Sammon Group is a great ambassador for Ireland within the UAE. It is encouraging to see it bringing its expertise to the region and collaborating successfully with ADEC to transform the vision of education standards in the UAE,” said O’Keeffe.