Oil or nothing: is The Big 5 Saudi in good shape?

How is The Big 5 Saudi managing to attract big-name exhibitors despite lacklustre oil prices?

ANALYSIS, PMV, Big 5 Saudi

The Big 5 Saudi 2015 marks the first of several construction events set to hit the Kingdom – and the wider Middle East – during the coming months.

The show’s timing also affords exhibitors an opportunity to address international concerns about lacklustre oil prices.

Nathan Waugh is event director at DMG Events, the company behind The Big 5 series of construction-related trade shows.

“This year, we are celebrating the fifth anniversary of the Big 5 Saudi, which has been on a serious growth pattern since its inauguration,” he explained. “We are looking to sell all available internal and external areas, or 20,000m2 of exhibition space.”

The event will host national stands from 15 countries, including Germany, Turkey, Greece, Italy, China, and India. Attendees at this year’s show will also witness the national debut of Hungary. Oil prices may have slipped since their peak, but the Kingdom’s construction sector is still proving to be a significant draw.

“We hope such increases in exhibitor and international participation, in addition to the educational courses offered at the event, will reflect positively on the number of visitors,” commented Waugh.

Saudi Arabia has made a great leap in the last decade, moving from a fully oil-dependent economy to a diversified one, supported by a consistent policy of providing the resources necessary for economic development. Moreover, the Saudi government has launched a series of large-scale projects to cater to increasing domestic demand.

The country’s focus on social infrastructure has been visible across four consecutive public budgets (2011-2014), especially in terms of reasonably priced housing programmes to combat accommodation shortfalls. Of course, such programmes have also had the added benefit of creating investment opportunities for the Kingdom’s construction community.

According to Waugh, The Big 5 Saudi has expanded its educational focus in a bid to keep pace with such developments.

He explained: “We believe that moving towards a more learning-focused event, whilst continuing to offer the widest range of international products, will generate a higher volume of visitors leading to more opportunities and a better return for our exhibitors.

“The main difference here is that we always seek ministerial endorsement for the event, given that the majority of projects [in Saudi Arabia] are government-led. This year, once again, we are honoured to be able to have the endorsement of the Ministry of Municipal and Rural Affairs, which – in addition to endorsing this event – will be hosting two workshops [during the show],” Waugh added.

So international business partners are interested, and Saudi Arabia’s government is on board. But do the numbers add up? Is the Kingdom an attractive prospect for businesses away from its many oilfields?

The World Bank seems to think so. It expects economic growth of 4.5% during 2015-2016 in Saudi Arabia, backed by a 5.5% increase in the non-oil private sector. This would be equivalent to 14% of government revenues from 2014. Moreover, by 2020, Ventures Middle East predicts that $3tn worth of development projects will be launched in the KSA by 2020.

Encouragingly, this ‘non-oil’ growth is expected to be driven – in no small part – by the construction sector. In many cases, the projects that will stimulate gains are either slated or underway already – the Riyadh Metro, the KSA-Bahrain Bridge, and the Makkah railroads, to name but three. It’s with this level of confidence that exhibitors are approaching The Big 5 Saudi.

“We consider 2015 as a launching pad for us to focus on achieving higher sales figures,” commented Ahmed Sayed, marketing manager at Roots Group Arabia.

In 2013, Roots partnered with Case Construction as part of its portfolio-expansion strategy. This year, the dealer plans to increase the footprint of its principal in the Kingdom, using The Big 5 Saudi as a springboard.

“[We] are planning to showcase our complete set of heavy machinery, including bulldozers, forklifts, and more,” revealed Sayed. “In addition to our existing equipment, we will use the show to launch new products from Case. Our message at this event is that Roots Group and Case are here to stay,” he affirmed.

Of course, no trade show worth its salt acts solely as a shop window, and DMG is acutely aware of the need for effective matchmaking. In this respect, the organisers have taken a distinctly scientific approach to the show.
“We are currently in discussions with several providers about matchmaking software, which can be integrated within our website to facilitate pre-event meetings between visitors and exhibitors,” said Waugh.

“With over 550 exhibitors spread across two halls, offering visitors the chance to actively engage [before the] show, saves them time and ensures that they see more of the products that interest them,” he added.

Nobody can say with any certainty how tempestuous price of oil will impact the Kingdom’s economy in the longer term. However, the organisers of The Big 5 Saudi have certainly taken measures to allay the more immediate concerns of the international construction community.

In addition to the educational and matchmaking services that are on offer, attendees can obtain assistance with visa applications, and can even find out how to go about establishing a business in Saudi Arabia.

The Kingdom’s construction industry might have strong links with the oil and gas sector, but the two are not indistinguishable. The Big 5 Saudi could well offer the ideal platform for a declaration of independence from the sector.

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