Expert: Financial crisis led to companies improving internal systems
Ramy Boufarhat, the chief operating officer of James L Williams Middle East, says that contracting companies that survived the global financial crises have stronger internal systems in place now
Ramy Boufarhat, the chief operating officer of James L Williams Middle East, says that contracting companies that survived the global financial crises have stronger internal systems in place now.
Boufarhat told MEP Middle East that after the global financial crisis, there was a tough period of time for all the contractors. However, it started to turn positive at the start of 2016.
He said: “All the companies that were around during that financial crisis time from 2008 to 2014, they went through a very tough period, and there was a mixture of fierce competition for projects; there were a lot of projects that were put on hold.
"There was very little on their margins. In 2012, the projects started to come in, but the clients’ budgets were based on post-global financial crisis prices, which really hurt us. It was a very price-driven market and it still is a very price-driven market. And obviously the cash flow problems in the market exist."
However, Boufarhat says that for the last couple of years there have been some improvements in the market. He said: “The good contractors are surviving and they are growing. You have to increase your internal efficiencies. Your labor has to become more efficient, which means your supervision has to be a little bit tighter. Your procurement has to be a little bit tighter. So we have done all of those."
Talking more about the challenges facing the MEP sector, Boufarhat added: “For the MEP [sector] specifically, difficulty lies in what we do. We do electromechanical services and such services rely on so many different complicated systems. So that is the challenge in our sector. You can't underestimate MEP technically. You can't rush it. Some MEP contractors rush it.
"I'll give you an example. If you rush the design phase or the structuring phase or you don't pay attention to vetting the design, then you end up resolving unfinished design issues in the middle of the project while you are constructing. Costs more money, more time, and it hurts. If you rush the procurement phase, you know you end up getting the wrong product. If you rush the MEP construction period, the effects of rushing won't be seen until you are commissioning the job.”
Australia-headquartered James L Williams started its UAE operation in 2008 with 15 employees and grew to over 2,000 employees in 2017.
Boufarhat's full interview will appear in the 1208 issue of MEP Middle East's, which will be out on the first week of August 2017.