Is formwork demand in the GCC on the rise?

As GCC investors shift their focus towards infrastructure and tourism-oriented developments, the region’s formwork sector is incorporating technology to meet the demand for speed and quality. Jamie Knights reports.

SPECIAL REPORTS, Sectors, Formwork

Those who operate in the scaffold and formwork sectors will tell you that there is little glamour in what they do. But without them, the Middle East’s megaprojects are unlikely to shine as they do on the world stage.

For the region’s formwork companies, the construction sector will continue to offer ample opportunities. In February 2016, Standard & Poor’s said government spending on projects, including infrastructure contracts awarded between 2016 and 2019, will be $330bn. One company that is keen to capitalise on this boom is Peri.

In 2015, the company reported global turnover worth $1.4bn, and also confirmed the purchase of a site in Germany’s Günzburg district to meet increasing demand for its products.

Company officials say the growth strategy adopted by Peri in 2015 hiked its annual turnover by 13%, and helped surpass its best sales performance, established in 2008. Peri’s 2015 plans also helped it maintain its global stronghold, with 90% of its turnover achieved from outside Germany.

Dr Fabian Kracht, managing director for finance and organisation, adds: “Through the early and consistent internationalisation strategy that was implemented, Peri could participate in and benefit from the growth markets in Asia, America and the Middle East”.

While some experts believe that the formwork and scaffold sector is a small and slow developing one, Khaled Amin El-Hady, executive manager for Acrow UAE, says the sector is witnessing decent growth.

Acrow’s projects in the region include the Park Rotana in Abu Dhabi, UAE, and the Oman Convention and Exhibition Centre.

El-Hady also points to technical advancements made by the company, such as the Acrow Truss System, which is used “as a gantry for bridges or any superstructure crossing obstacles, [and] can work with spans up to 40 metres”.

He adds: “Acrow’s self-climbing system is the best procedure for fast casting for high rise buildings, and can be used for columns, shear walls and cores.”

Technical enhancements indicate a demand for increased quality products in the region. Chris Jardine, general manager for RMD Kwikform UAE, says he believes “when it comes to pushing the boundaries of construction, the Middle East has, for many years, been at the forefront of developing fast-track approaches to deliver some of the world’s most challenging and iconic structures”.

He adds: “One of the main reasons behind this has been the relatively quick transition from more traditional labour-intensive methods of constructing – with concrete in particular – to the rise in popularity of system formwork and shoring.”

Price wars

However, the sector continues to grapple with challenges, at the centre of which is money.

“The main challenge we are facing are the prices, as the clients always ask for lower [values],” explains El-Hady. Nevertheless, as he points out, there are numerous alternative strategies that can be deployed in such a situation. At Acrow, El-Hady adds, “we compromise, and never let go of a project because of price issues”.

To compound the situation, the industry is also plagued by payment delays at the moment. As El-Hady confirms, since early-2015, late payments “have been the most catastrophic problem” the sector has faced. “There is always a delay in payments.”

Shadab Ahsan, international business manager for Ascend UAE, which has worked across the region on airport, mall, and theme park projects, concurs with El-Hady’s analysis.

He adds: “There are certain companies that always tend to delay payment for their supplier and use some crisis as an excuse.

“It is always better to deal with more caution and better credit control,” Ahsan continues, adding that “credit insurance is the best option at this moment”.

Nevertheless, a slowdown in the market means companies now have the opportunity to add value with additional services that “some of the competitors don’t provide”.

El-Hady explains: “We provide technical services, including detailed shop drawings, calculation sheets and site inspection.”

Additionally, as finance concerns persist, awareness is also on the rise across construction sites about health and safety standards, Ahsan adds.

“Scaffolding [requires] certified components that fulfil the requirement of relevant standards, such as castor wheels with embossed safe working loads that conform to EN1004,” he explains.

“Aluminium profiles must also match the configuration of alloy 6082 T6, so that it eliminates the risk of any unforeseen accident on the project sites.”

Certainly, avoiding onsite accidents has grown in significance as much of the world continues to watch the GCC region for its upcoming megaprojects and events.

“Most construction sites are targeting for their scaffold erectors to be trained by PASMA [Prefabricated Access Suppliers’ and Manufacturers’ Association] certified training centre,” says Ahsan.

Demand for better health and safety standards appears to be growing in the region, Ahsan says, “as the [PASMA] law requires any person erection dismantling [or] altering the movable scaffold to be competent with relevant certification”.

Owing to its diligence, Ascend owns the first PASMA-approved training centre in the GCC, and also employs numerous licensed scaffolders.

However, the formwork sector’s current challenge is to develop fast-track construction methods by optimising technology, particularly 3D design, Jardine says: “But I believe this is only a part of the long-term solution to construction, as I think we can go further by adopting a 4D programme management approach.

“The fourth dimension we refer to is time, which when [concerned with] temporary works, really has an impact on both cost and programme delivery.

“With a large proportion of the market being the hire of equipment, it is clear that if you can reduce hire time, you can make significant savings,” RMD Kwikform’s UAE chief adds.

For the formwork sector, it is vital to recognise the importance of collaboration between a project’s consultants, contractors and suppliers.

Once a 3D plan has been created, Jardine explains, the next step is to identify the 4D elements of a project, “like programme sequencing, and therefore the timings of delivery and collection of material onsite”.

He adds: “If you can look through the programme and design, then you can make changes to erection sequences and plan timely onsite delivery of things such as large precast sections, without disturbing the overall programme progress.

“This in turn focuses the mind on design solutions that can assist with further programme time reduction, especially if engineers have practical experience of the job at hand.”

RMD is already putting elements of a 4D work system in place, as witnessed at the UAE’s Abu Dhabi International Airport.

“It is clear from the ongoing delivery of this and other projects where we are combining 3D with 4D principles, that 4D programme management can quickly become a major part of the development of the construction industry in the Middle East,” Jardine asserts.

“The key, however, will always be early collaboration and a willingness to take full part in the 4D journey.”

Seeking support

As advances are made in technology, there is no denying the GCC’s scaffolding and formwork sector will have countless opportunities for growth in the future.

El-Hady says the formwork sector has been “greatly moving forward, as there are many new projects” planned or ongoing in the region, and “contractors now are looking for formwork companies to help them achieve their requirements”.

“The Gulf [is investing] in the infrastructure and high-rise building [sectors],” he says, adding many of Acrow’s ongoing projects are in the former category.

With the traditional reliance on oil “diminishing across GCC”, Ahsan says alternate revenue generation streams are “getting more serious attention, [and] there is immense opportunity in industrial development and tourism” projects. He says Ascend is witnessing an annual rise in mobile access tower needs, and expects “demand to quadruple” in the next three to four years, as the UAE, Qatar, Oman, and Saudi Arabia plan more such developments.

Amidst such optimism, it is likely the GCC formwork sector’s supporting role will have its time in the spotlight for some years to come.

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