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Can GCC suppliers survive oil-hit project plans?

The GCC’s door and window manufacturers are exploring new technological and geographical avenues to sustain growth as regional economic challenges mount, CW finds

Assa Abloy is working on the Al Habtoor City development in Dubai.
Assa Abloy is working on the Al Habtoor City development in Dubai.

GCC construction companies appear to be bearing the brunt of project postponements and cancellations as a potential economic slowdown looms over the region. Employees of contracting firms are also facing payment delays, as was recently evidenced when workers of Saudi Oger and Saudi Binladen Group filed salary deferral complaints with the Kingdom’s Ministry of Labour.

However, suppliers are perhaps the most impacted of the lot in such turbulent times. Often relegated to the end of construction’s elongated food chain, building material and system suppliers are all too familiar with low cash inflows as clients and contractors struggle with payments.

Understandably, supplier firms are now eyeing markets outside the Gulf to sustain their operations, even though, as Simone Sebastiani, business development manager for Giesse Gulf explains, key GCC hubs continue to present ample scope for growth.

Giesse is a supplier of aluminium doors and windows, and has worked on projects such as the Arabian Ranches villa complexes in Dubai, Crystal Plaza in Sharjah, and Princess Noura University in Riyadh.

Sebastiani said the company currently considers the UAE, Saudi Arabia, and Kuwait as its “main markets”.

“The UAE and KSA remain the most interesting markets, with the highest projects value in the region and many projects already in the construction phase,” he adds.

“The political and economic situation in the region may be a threat and slow down the market more than expected, especially in countries like Saudi and Kuwait, where a good part of the investments are public.

“For Giesse’s scope, which includes hardware for aluminium windows and doors, we see good opportunities in countries like Oman and Bahrain, where the residential construction markets are currently undersupplied,” Sebastiani reveals.

“With rising demand, several new developments are due for completion in the next few years. In Bahrain, for example, 1,443 and 5,241 housing units are planned for completion by 2016 and 2017, respectively.”

This undersupply could be attributed to the growing economies of the GCC, which Juan Vela, regional director of dorma+kaba, opines will persist despite challenges in 2016. Dorma+kaba focuses mainly on commercial, institutional and industrial buildings, and also has residential projects in its portfolio.

“A rise in population; airport construction escalations predicted by 2020; the increase in the governmental projects such as hospitals, schools; and, the proposed integrated rail network between GCC countries will continue to boost the region’s construction activities,” Vela adds.

The company’s ongoing projects include collaborative work on the Mafraq Hospital in Abu Dhabi and the Mall of Qatar in Al Rayyan. At the King Hussain Cancer Centre in Jordan and Salalah Airport in Oman, dorma+kaba is working as a provider of access systems.

Vela is most excited about the Katameya Airport in Egypt, a project on which it is involved with the aviation ministry in Egypt, he tells Construction Week.

Indeed, automation is at the crux of Vela’s development plans for the future, keeping with the emerging trend for technologically-savvy construction techniques, he explains.

“We have seen the world changing from mechanical hardware to electronic smart home solutions. A trend in door solution technologies is for consumers to be able to access their homes via applications on their smartphones, as e-commerce and e-living are taking over the world,” Vela continues.

“The need for GPRS takes access solutions into the internet of things, allowing complete security to inhabitants with real-time data analysis and monitoring of access while enabling proactive maintenance.

“Cloud computing is no longer a tech-solution, but an every-man superpower that allows users to configure their access control systems without the help of software specialists and analysts.

“After all, this region is looking for smart, easy, affordable, and timeless access solutions,” Vela adds.

The advent of technology in construction inadvertently finds its way towards building information modelling (BIM). Manufacturers in the GCC are conscious about the necessity of creating – independently or in collaboration with specialist firms – doors and windows that are responsive to latest technology tools, John Middleton, market region manager for Assa Abloy’s Africa and Middle East operations, tells Construction Week.

“BIM is an intelligent 3D model-based process that equips architecture, engineering, and construction professionals to manage buildings and infrastructure more efficiently,” he asserts.

“We have started developing a comprehensive BIM portfolio to further support the architectural community through the specification and design process. We also see a growing demand for BIM content in both the US and European markets due to its many benefits.”

Assa Abloy’s Middle East umbrella covers, besides numerous other firms, Prometal, a door manufacturer it acquired in June. The manufacturer has previously worked on the Dubai Metro, Kuwait Business Tower, and the Viva Bahriya development in Qatar.

Its ongoing projects include Al Habtoor City and Dubai Opera. Prometal’s portfolio includes fire-resistant doors, which have been certified by Thomas Bell-Wright, Middleton points out, and also supplement Assa Abloy’s existing repertoire of environment-friendly doors.

“Door manufacturers have to constantly upgrade themselves by adding new tests to enhance their product portfolio of fire-rated doors as all projects differ from each other in this region,” Middleton continues.

Indeed, ‘green’ considerations are rapidly gaining traction as product differentiators in the Middle East, and the trend will continue if legislative emphasis is placed on sustainable development, according to Vahe Yacoubian, the general manager of TSSC’s doors and windows division.

In a conversation with Construction Week, he explains: “The growing trend of green adoption across both commercial and residential sectors has given significance to low u-value rated products,” he explains.

“Therefore, a combination of thermal profiles and double-glazed energy efficient glasses steal the limelight in the windows and doors manufacturing sector.

“Estidama, Dubai’s Green Building Code, and LEED certification are playing an important part in forming the future of green building in the UAE.

“There would be slightly higher construction costs due to procurement of green building materials, but in return it will lower the operational costs over the life of the buildings,” Yacoubian concludes.

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