CW Leaders Summit: To diversify is key, says DSI
Easiest way to enter regional market is through acquisitions
Contractors must remain responsive to local market conditions in order to achieve and maintain regional efficiency, said Drake & Scull International (DSI) CEO Khaldoun Tabari at the CW Leaders in Construction Summit at the Armani Hotel in Dubai.
Tabari said the market uncertainty that prevailed from 2009-2010 had a negative impact that lead to a wave of consolidation. "The aftermath was mergers and acquisitions to prop up balance sheets and consolidate costs," said Tabari.
By mid-2011, the market outlook had changed due to increased liquidity flows that resulted in "huge infrastructure works. Now there is speculation as to a double-dip recession. The New Spring has been positive, but it is causing uncertainty that is impacting on growth."
Tabari said the current market was characterised by increased risk, which was challenging contractors to manage such risk.
"Are we [as contractors] immune? There is no real measure of control in terms of such risk. Managing it is a function of your business model and its responsiveness."
Tabari said that DSI, in particular, mitigated such risk through diversification. "The key solution is to remain responsive to local markets and transfer local knowledge. The easiest way to get into such markets as Saudi Arabia and Qatar is through acquisitions, as this immediately gives you resources on the ground."