APRIL 2018
THE DEFINITIVE GUIDE TO THE REGION'S CONSTRUCTION PROFESSIONALS
A PREVIEW OF DOOSAN BOBCAT MACHINES AT INTERMAT 2018 KEY HIGHLIGHTS FROM
CONSTRUCTION INNOVATION FORUM 2018
THE GAME CHANGER
Arabtec's group chief executive, Hamish Tyrwhitt, talks about the recipe for the CBNME takes a tour of the Opportunity District at the recent successes of one of the UAE's Expo2020 site with MEP contractor ASU leading contractors
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// CONTENTS
APRIL 2018 // ISSUE #38
8 ED NOTE 12 NEWS 28 COMMENT
DDP’S ZAKI AMEER TALKS ABOUT HOW TO SUCCEED WITH OFF-PLAN PROPERTY INVESTMENTS
30 COMMENT
ROBINA SHAH FROM OPTIMUS LAW DISCUSSES HOW BRITAIN AND ITS SECOND CITY ARE TRULY OPEN FOR BUSINESS
32 COVER STORY
ARABTEC GROUP CEO TALKS ABOUT CREATING A SUSTAINABLE FUTURE FOR ONE OF THE UAE’S LEADING CONTRACTING GIANTS
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CONSTRUCTION BUSINESS NEWS ME // APRIL 2018 //
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CEO Wissam Younane wissam@bncpublishing.net Director Rabih Najm rabih@bncpublishing.net Group Publishing Director Joaquim D'Costa jo@bncpublishing.net +971 50 440 2706
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36 CONSTRUCTION INNOVATION FORUM KEY HIGHLIGHTS FROM THE EVENT
64 PRODUCT LAUNCH
MERCEDES BENZ TRUCKS MENA GM GIVES A TOUR OF THE NEW ACTROS AND AROCS
68 EDITOR’S PICK 70 DIARY 6
// CONSTRUCTION BUSINESS NEWS ME // APRIL 2018
For all commercial enquiries related to Construction Business News ME contact sales@bncpublishing.net T +971 55 339 5097 All rights reserved © 2015. Opinions expressed are solely those of the contributors. Construction Business News ME and all subsidiary publications in the MENA region are officially licensed exclusively to BNC Publishing in the MENA region by Construction Business News ME. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Images used in Construction Business News ME are credited when necessary. Attributed use of copyrighted images with permission. All images not credited courtesy Shutterstock. Printed by UPP
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// EDITOR'S NOTE
EDITOR’S NOTE
A GOOD START The Construction Innovation Forum, arranged by BNC Publishing, saw more than 150 people attending the panel discussions and discussing the pressing issues that are affecting the region at the moment. The forum focussed on the current topics of technology solutions for the growing infrastructure projects in the region, the increasing benefits of BIM to tackle the challenges in MEP, and the sustainability factor in HVAC in the GCC. Industry experts from well-known organisations like the Dubai Land Department, Ministry of Infrastructure Development, Bentley Systems, Aconex, Drake & Scull International, AESG, Ramboll, Voltas, Daikin, Cundall, ASGC, and many more, participated in the event. Panellists discussed how everyone talks about Building Information Modeling (BIM) but very few believes in using the full potential of it. The discussions also turned interest-
8
ing when the experts talked about adopting relevant technology solutions for the growing infrastructure projects in the region. It’s quite well-known that the regional construction industry is one of the less digitised ones currently. Contractors still believe in the drawing board concept and are sceptical to adopt changes. Using technology means having well-connected business systems, thus easing the pressures of work. Events like Expo 2020 have given an impetus to commercial as well as non-commercial project growth. Reports state that the UAE alone is going to witness $33bn Expo-related projects. Technology represents a paradigm shift for the region in terms of work culture, project delivery schedule, and improving the quality of work. The UAE has always been a frontrunner in whatever they do. The world looks at us to make an initiative to become more sustainable and be adept in adoption of technology.
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Paromita Dey Editor paromita@bncpublishing.net @paromitadey1 linkedin.com/in/paromita-dey
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// UPDATE AN UPDATE FROM AROUND THE REGION
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REAL ESTATE
ALDAR, EMAAR SIGN AED30bn STRATEGIC JOINT VENTURE FOR FUTURE PROJECTS
Dubai-based Emaar Properties and Abu Dhabi-based Aldar Properties have entered into a strategic joint venture (JV) to develop projects worth AED30bn locally and internationally. The JV has an initial focus on two projects, one in Dubai and another in Abu Dhabi, and brings together the capabilities of the two developers to deliver exceptional destinations. It also acts as a catalyst for other potential co-investment opportunities between the developers in Abu Dhabi and Dubai. The JV was signed by Mohamed Khalifa Al Mubarak, 12
chairman of Aldar Properties, and Mohamed Alabbar, chairman of Emaar Properties. Al Mubarak said: “Without a doubt, the JV will expand the country’s portfolio of iconic real estate projects and there is no limit to the development possibilities created by the partnership between Aldar and Emaar. Together, we have an incredible proposition that will contribute to achieving our national vision and make the UAE an even more exciting place to live and visit.” Alabbar added: “This JV is a testament to the spirit of partnerships that have contrib-
// CONSTRUCTION BUSINESS NEWS ME // APRIL 2018
uted to establishing the UAE as a global hub for business and leisure. We are drawing on our proven competencies in delivering high-quality master-planned communities, that have not only redefined lifestyles but also created tremendous economic value for our country. This partnership sends a powerful message that the UAE is at the forefront in shaping global real estate trends, and also signifies the unbreakable bond between the two emirates.” The master-planned destination in Abu Dhabi will be situated in the emirate’s cultural
district on Al Saadiyat Island, named Saadiyat Grove. Set to open in 2021, the mixeduse development will feature close to 2,000 residential units, two world-class hotels, 400 serviced apartments, and 130,000sqm of experiential lifestyle and retail space. The Dubai project – Emaar Beachfront – is a unique new waterfront destination. The private island will feature a wide range of leisure and lifestyle attractions including F&B outlets, beachside play areas, retail pop-ups set along a promenade, and 7,000 residential units.
CONSTRUCTION
MAPEI UNVEILS $6.5bn PRODUCTION FACILITY AND NEW OFFICES IN DUBAI Construction chemicals provider, Mapei, invested more than $6.5mn for the expansion of its production facility and new offices at the Dubai Investments Park (DIP). At the 40,000sqm plot, the newly expanded facility now features an additional 8,000sqm covered warehouse for larger storage capacity. The addition of the new liquid line in the expansion allows Mapei to increase powder and liquid product volumes, logistics, technical centre, and accommodate increasing product demand as it expands its operations to new territories and manufactures new product lines for the region. The new offices feature more than 2,000sqm of builtup area which includes a showroom and training centre and is now a workplace to more than 126 employees from over 22 nationalities. Veronica Squinzi, global development director of Mapei, said: “We reinforce and position ourselves based on
the requirements of the economic developments in the region and enhancing our production and customer service capacity, both in terms of increased logistics as well as technical support is part of the company’s wider strategy to turn our facility in Dubai into the regional headquarters, effectively serving the Middle East, Eastern and part of the Sub-Saharan Africa.” This expanded facility is among 82 subsidiaries, with 75 manufacturing plants contribut-
ing to 25,000 tons of products shipped daily from 54 countries across five continents. Stefano Iannacone, regional director of Mapei Construction Chemicals, said: “We are optimistic with the increased demands in the construction market. Our new expanded facility in Dubai will help in supporting and serving the demand from projects and to fulfill the visionary requirements. This will become the pillar on which building our production future facili-
ties we plan to build in other countries. In fact, we intend to continue our investments in the region and support the local markets by producing powder and liquid products, the formulations of which, we know can establish our presence in the market, fastest.” Omar Al Mesmar, general manager of DIP, commented: “Mapei, manufacturing innovative products to the most stringent health, safety, and environmental standards within the mixed-use DIP, is a matter of immense pride. DIP is committed to enhancing customer experience and hence is continuously improving its internal road network, directions to customers, as well as power and utility systems.” MAPEI is determined to strengthen its market presence across the region by introducing more product lines in the Midd le East, and Eastern and Western Africa.
Ellington Properties broke ground on its Belgravia Heights I, located in JVC, and follows the introduction of three projects under the same brand of Belgravia.
Dubai-based developer, Azizi Developments, announced that foundation works are 85% complete and basement works have commenced for Azizi Riviera Phases 1 and 2.
// BITESIZE NEWS
Abu Dhabi-based developer, Modon Properties, appointed Arabtec Construction, a wholly owned subsidiary of Arabtec Holding, to build the Show Village, located in Khalifa City. WWW.CBNME.COM
EFS Facilities Services, the regional facilities management provider, has been awarded an AED140mn integrated facilities management contract for five years for Etihad Airways.
CONSTRUCTION BUSINESS NEWS ME // APRIL 2018 //
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// NEWS
CONSTRUCTION
OMNIYAT APPOINTS MARASI PROJECT CONTRACTOR
We will continue pursuing ambitious investments with an emphasis on projects that have a positive impact on people’s lives. ” HH SHEIKH MOHAMMED BIN RASHID AL MAKTOUM, THE VICE PRESIDENT, PRIME MINISTER OF THE UAE, AND RULER OF DUBAI
Dubai-based developer, Omniyat, has appointed the contractor for its Dorchester Collection project in Marasi on Dubai Canal. Omniyat has awarded the construction to a joint venture between Roberts Constructions and Impresa Pizzarotti & C. S.p.A. Work on the site has already begun and the project is due for
completion in 2020. The development includes two towers, which will house the luxury five-star hotel and exclusive residences, high-end food and beverage (F&B) outlets, retail, as well as a surrounding mixed-use precinct. Designed by Foster + Partners, the site includes Dorchester Collection’s first hotel in the region and
luxury residences managed by the hospitality brand, named Private Residences by Dorchester Collection. Mark Phoenix, managing director at Omniyat, said: “We always select the best partners that help us execute our vision. I have no doubt that this joint venture will yield immaculate results.” Graeme Robson, chief executive, Roberts Constructions, said: “Omniyat is known for creating bespoke developments of the highest quality, with relentless attention to detail when it comes to luxury finishes and appointments. We are also honoured to deliver this project for such an esteemed brand as Dorchester Collection.” Roberts Constructions has partnered with Impresa Pizzarotti & C. S.p.A to deliver the luxury five-star hotel and exclusive residences in a joint venture arrangement.
UAE credit growth by economic activity, % of total AED IN NUMBERS 1.45 // trillion in 2017
• • •
AED1.28BN
Demand for business credit has increased moderately in Q4 2017, according to the latest credit sentiment survey by UAE Central Bank. By loan type, the modest increase in demand for loans is most evident in conventional loans and large firms.
Demand for personal loans in aggregate was flat in Q4. However, survey respondents reported a moderate increase in demand for housing – other (includes refinancing, renovations), and housing – owner-occupier. In terms of outlook, demand for both personal and business lendingDEWA are expected to increase in Q1to 2018. awarded contracts construct four
400/132kV substations 16
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Credit in transport & logistics
Credit in construction & real estate 350
AED bn
y/y growth
300
298.2
250 200
264.8 235.0 212.6
12 10 8 6 4
150 100
14
2 2014
2015 2016 2017 Construction and Real Estate, AED bn (LHS) Construction and Real Estate, y/y growth (RHS)
Credit in wholesale & retail trade 2017
0
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// NEWS
// THE BIG PICTURE
Dubai’s Roads and Transport Authority (RTA) said the tunnelling on the Route 2020 project, which spans 15km from Nakheel Harbour and Tower Station up to the site of the Expo 2020, is progressing at a steady pace with more than 50% of the excavation work already completed. REAL ESTATE
TOP 5 WEB STORIES
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18
1
Modon Properties appoint Arabtec
2
Omniyat appoints contractor
3
Azizi begins Dubai project works
4
F+G wins Al Fahid works
5
Siemens secures power plant contract
ARADA LAUNCHES NEW VILLAS AT NASMA RESIDENCES ARADA has announced the launch of a new type of property, the Sama Majlis Villa, at its Nasma Residences community in the heart of New Sharjah. The Sama Majlis Villa is a four-bedroom independent property with an open-air majlis based on an upstairs terrace, in a first for the Sharjah market. The exceptionally designed home was launched at a special sales event held on March 10, where it met with significant interest from investors from around the UAE and beyond. Other units on sale at Nasma Residences include two-, three-, and four-bedroom townhouses and semi-detached villas, and four- and five-bedroom signature villas. The Sama Majlis Villa is being sold in Phase 3 of Nasma Residences, an 800 villa and townhouse community, located adjacent to Emirates Road and Maliha Road. Launched in March 2017, Nasma Residences sold out the first of the community’s five phases in less than a month.
// CONSTRUCTION BUSINESS NEWS ME // APRIL 2018
HE Sheikh Sultan bin Ahmed Al Qasimi, chairman of ARADA, said: “With construction work on the first phase of Nasma Residences already a fifth complete, we are on course to deliver ARADA’s first homes by the end of this year. The introduction of the Sama Majlis Villa also shows our intention to provide a wide portfolio of beautifully designed homes for both investors and end-users.”
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// NEWS
CONTRACT
DAMAC ISSUES ENABLING WORKS TENDER FOR ITS VERA RESIDENCES
Dubai-based developer, Damac Properties, has issued a new tender for enabling works on its VERA Residences, a 30-storey tower in Business Bay. The tender is being issued for enabling works, which will prepare the ground for foundational layout, piling work, followed by main construc-
tion work. The tower includes a basement and ground level, three podium levels, 25 residential floors, and a rooftop. Mohammed Tahaineh, senior vice president – Commercial, Damac Properties, said: “DAMAC is issuing the tender following unprecedented response by buyers
for this value-driven investment proposition, located in the most desirable area of Dubai. We wanted to start construction work without delay, to be in a position to deliver the units to their new owners as quickly as we can.” The enabling works tender is for foundational work at the VERA Residences site and will see the appointment of enabling contractor to take place by first week of April, with the enabling works being completed within 30 days after the contract award. The 30-storey tower is complemented by life-enhancing amenities including dedicated children’s play area, barbecue area, temperature-controlled swimming pool, fitness centre, jogging track, steam rooms and sauna, landscaped gardens, as well as covered parking. VERA Residences will also include a shopping boulevard, further elevating the community feel and providing convenience to residents.
// THEY SAID...
Jewelz is launched with a refined customer in mind, offering luxury living at an affordable price and 15% returns on the total investment. ” RIZWAN SAJAN, DANUBE PROPERTIES
The positive results achieved by Emirates Steel in 2017 indicate our success, despite the challenges in the industry globally.” HE ENG SAEED AL REMEITHI, EMIRATES STEEL
FAITHFUL+GOULD WINS FIRST CONSTRUCTION WORKS FOR AL FAHID ISLAND Al Fahid Island Development, a highend mixed-use waterfront development in Abu Dhabi, has awarded its first construction package to Faithful+Gould, a member of the SNC-Lavalin Group. The project management consultancy was engaged in Q4 2017 by Al Fahid Property Development to provide cost management services at design, tender, and construction stages on the development. Local contractor Bright Accord General Contracting has been awarded the nine-month reclamation
20
package and construction work has now begun on site. Faithful+Gould’s cost management services cover the reclamation, marine works, site-wide infrastructure and landscaping, residential, and leisure components. Steven Batchelor, regional director for commercial services in SNC Lavalin’s Faithful+Gould business, said: “We played a key role awarding the first construction contract for this development and are excited to see the development take its formative shape. The client has master-planned a truly
// CONSTRUCTION BUSINESS NEWS ME // APRIL 2018
exceptional luxury development that will transform the landscape over the coming years.” Located between Abu Dhabi’s Saadiyat and Yas Islands, Al Fahid Island will host a variety of residential offerings including beachfront villas, luxury townhouses, and medium-rise apartment blocks situated around a marina, a beach club, retail and F&B outlets, schools, community facilities, and landscaped community parks. The masterplan will be delivered in five phases, with phase one having a plot area of circa 2,100ha.
We are delighted to announce that Azizi Developments has pushed the boundaries of innovation with the development of one of the tallest towers in Dubai.” MIRWAS AZIZI, AZIZI GROUP
// NEWS
REAL ESTATE
DUBAI LAND DEPARTMENT ANNOUNCES WINNERS OF GULF REAL ESTATE AWARDS 2018 Dubai Land Department (DLD) has announced the winners of the Gulf Real Estate Awards 2018, who were honoured at a closing ceremony that took place on March 21, 2018. The event is inspired by the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and his vision of encouraging further innovation to achieve a qualitative leap that positions Dubai as the regional capital of real estate innovation. The initiative celebrates the top regional real estate achievements in cooperation with Awards International UAE. During the closing ceremony, Dubai Land Department announced the winners from 22 categories in the presence of several prominent real estate personalities. Dubai Land Department received more than 170 nominations submitted by 69 companies in 22 categories from eight countries including Bahrain, Kuwait, Saudi Arabia, and the UAE, as well as Egypt, India, and the Maldives. HE Sultan Butti bin Mejren, director general of DLD, said: “Even though this is only the second edition of the Gulf Real Estate Awards, the programme has already acquired an international reputation that exceeds the boundaries of the region. This is evident from the entries we received from non-GCC countries, showing the great confidence that the world has in Dubai’s initiatives and transparent judging mechanisms.” 22
The winners of the 22 categories were: 1. Best Real Estate Project (Affordable Housing) – Deyaar 2. Best Real Estate Project (Luxury Residential) – Knight Frank (Atlantis) 3. Best Real Estate Project (Hotel) – Dubai World Trade Center (Courtyard Hotel) 4. Best Real Estate Project (Master Development) – Diamond Developers (The Sustainable City) 5. Best Real Estate Project (Off Plan) – Binghatti Stars 6. Best Real Estate Brokerage Initiative (Commercial) – Mallorca Properties 7. Best Real Estate Brokerage Initiative (Residential) – P.K. Properties 8. Best Real Estate – Customer Experience Initiative – Emaar Community Management LLC
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9. Best Real Estate Developer – Sustainable ‘Green’ Development – Diamond Developers (The Sustainable City) 10. Best Marketing Campaign – Binghatti Stars – Binghatti Developers 11. Best Facility Management Company – Emaar Community Management LLC 12. Best Owners Association Management Initiative – Mullak 13. Best Government Initiative – National Housing Company (NHC) 14. Best Employer in Real Estate – KAIZEN Asset Management Services 15. Happiest Community – Diamond Developers (The Sustainable City) 16. Best Media and Communications – Majid Al Futtaim – Communities
17. Best Real Estate Registration Trustee – Tamleek Real Estate Registration Trustee 18. Best Architecture Project – Dubai World Trade Center (Theatre) 19. Best Real Estate Research – Majid Al Futtaim – Communities 20. Best Real Estate Consultancy Company – KAIZEN Asset Management Services 21. Overall Real Estate – Binghatti Developers – Binghatti Stars 22. Real Estate Personality of the Year – His Excellency Marwan Bin Ghalaita, CEO of the Real Estate Regulatory Agency, in recognition of his efforts to organise and develop the sector
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MAKING A COMEBACK Zaki Ameer, founder of Dream Design Real Estate (DDP), reveals how to succeed with off-plan property investment and avoiding pitfalls
B
uying off-plan has been bit of a "dirty word" since the dark days of the property crash in 2008, when scores of buy-toflip investors were left out of pocket. However, as speculated, off-plan buying is making a comeback in 2018. Most major developers now offer generous payment plans for their off-plan projects, yet in a bid to avoid a repeat of the crash, there are restrictions in place to prevent an influx of buy-toflip investors hiking the prices up for the end-user (the people that actually want to live in the property). For instance, the UAE Central Bank’s rule allows only 50% loanto-value ratio, meaning you need to stump up 50% of the property value in a deposit. This avoids investors putting down low 10% deposits, only to resell the property at a skyhigh price at the expense of the person who actually wants to live in the building. When it comes to purchasing offplan, often large investment companies will be given the opportunity to buy a number of units for a discounted price pre-launch. The remainder are usually then opened out to individual investors at the launch itself. Sometimes, agents do get pre-launch homes to sell and they will try to sell these to serious investors already on their database. Either way, the real estate agent will provide with all of the relevant off-plan marketing mate28
The earlier you get access to the property for sale, the greater the chance of securing one of the better units and of getting a discount on the price.” rial and you will have the chance to assess the units on offer, usually by inspecting a show home. The show home is designed to be a typical property equipped with the level of specification you can expect from your own investment. The earlier you get access to the property for sale, the greater the chance of securing one of the better units and of getting a discount on the price. Your negotiating position should be determined by the demand the development is attracting. The higher the demand, the less chance you have of negotiating the price down. Thinking of purchasing off plan? Below are some tips to help your decision-making process. You don’t need as much cash as you think: While you will need a hefty lump sum in savings as a deposit, the good news is that this doesn’t always equate to 50% of the property value. In some instances, the cash deposit required can be as low as a 20% initial payment. How? Well, the
// CONSTRUCTION BUSINESS NEWS ME // APRIL 2018
property developers recognise that not many people have as much as a 50% deposit saved and are coming up with their own payment plans to get would-be buyers a foot on the ladder. These plans include 30:70 plans where you pay 30% first and the remainder on completion, and many payment plans now allow you to pay in 10% instalments as each phase of construction is completed. Off-plan is cheaper than ready property: Buying off-plan allows you to arrange your finances better and means you don’t have to be lumbered with a loan for the whole amount of your property. But there are, of course, advantages to buying a ready property: with house prices down, coupled with tricky off-plan mortgage rules, there has been a boom in ready property sales. However, it’s generally cheaper to buy off-plan (up to 30% below market value), and that gap is expected to get bigger as developers work to drive interest in off-plan investment.
Reputed developers are back in business: One potential stumbling block would-be buyers may face when buying off-plan in Dubai is that the UAE banks will not lend to all off-plan projects. The decision largely comes down to the developer and their credentials. But the big players – Emaar, Akoya by Damac, and Azizi – have all secured mortgage lending for their off-plan projects. Going with a reputed developer that the banks recognise will also ensure your money is safe-guarded from rogue developers. Only legitimate developers can advertise property for sale: Since October 2016, regulations came into effect which require developers and brokers to get approval from Dubai’s Real Estate Regulatory Authority (RERA) before they advertise property in the media. The new regulation is aimed at cracking down on fake property ads, protecting both buyers and genuine developers. The reasons for avoiding off the plan properties have been well docuWWW.CBNME.COM
mented, with the majority of leading experts strongly advising against this kind of investment. But despite the drawbacks, off the plan properties remain to be a popular investment option, particularly amongst keen investors with little to no experience, and first home buyers as they are provided with ample time to save for settlement. Ultimately, all investors are exposed to the same risks and complications involved in purchasing property off the plan. To ensure you are wary when investigating off the plan options, what follows is some tips on how to obtain the best deal. Beware of dodgy developers: Before entering into a contract with a developer, performing a background check is essential. You will want to research past projects and assess the chances of the developer going into liquidation before the project is complete. If you are doing this without expert assistance, visit any of the developer’s previous work to
inspect the quality, and seek references from previous clients. Choose your property agent wisely: Agents have been known to wine and dine clients, fly them to the development site, and accommodate them in five star hotels in order to have them purchase the property. What the client doesn’t realise is that these costs and extravagances are packaged into the purchase price of the property. Don’t be fooled by rental guarantees: Developers will often entice buyers by offering a rental guarantee for the first one or two years after completion. As tempting as this sounds, once this period is complete, many owners will find that the tenant has been paying an incredibly low rent, with the developer subsidising the difference and factoring this into the purchase price of the property. Make sure the numbers add up correctly before you accept. Beware of potential financial risks: No property investment is immune to the fluctuating property market, including off the plan properties. Research local property prices to find out how the market has performed over the last few months and try to gauge the direction of prices. If the value of the investment property does fall, it usually occurs between the point of purchase and the point of completion. Buying off-plan in a market where prices are depreciating can put your investment at a greater risk. Gain legal advice. This point is critical, particularly for first home buyers. Before you sign anything or money changes hands, have a solicitor look over all the contracts and documents. Ensure the contract contains a “funds set” or a “drop dead” clause outlining the date the property must be completed by. If this is not met, you should be able to withdraw should you wish to, and have the deposit refunded. Other important clauses should relate to “acquisition” and “commencement”, as well as your rights to re-sell the property.
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// OP-ED
THE TRUTH ABOUT BREXIT Robina Shah, CEO and head of immigration from Optimus Law, talks about how Britain and its second city are well and truly open for business, despite the Westminster gossip and Brexit scare stories
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n early 2016, the UK government led by the now long-forgotten ex-Prime Minister, David Cameron, warned that if Britain left the European Union, the economy would collapse. The Governor of the Bank of England warned of recession and mass unemployment. However, the direct reverse happened – so what is really happening in the UK economy and should GCC investors be taking a second glance at what’s on offer? Fiscally, the UK’s position has improved since the Brexit vote. The economy grew by 2% in 2016 and 1.8% in 2017. The fall in Sterling has made exports cheaper and consequently, the UK export growth reached a nine-month high in December 2017 as it continued to outperform Europe’s other largest economies. UK exports grew 13% year-on-year in Q3 2017. Foreign direct investment in the UK businesses has continued to rise and is set to eclipse $2tn for 2017. In addition, the Office for National Statistics reports that for Q3 2017 (a year after Brexit), the unemployment rate fell to 4.3%, down from 4.8% for a year earlier and the joint lowest since 1975. Brexit has not stopped companies from hiring. Britain’s robust economy and seemingly unstoppable confidence, may be 30
thanks partly to huge levels of government investment in infrastructure, digital communications, and housing, which forms part of the country’s wider $32bn National Productivity Investment Fund. ETHNIC DIVERSITY Gulf investors will be particularly welcome in a city with major populations from the Middle East, India, and Pakistan. Over 20% of Birmingham’s residents are Muslim and 46.9% of the population are ethnic minorities. Major spoken languages include Arabic, Hindi, Tagalog, Pashto, Urdu, Polish, and Tamil; and GCC investors can easily find professional services companies that understand their needs on issues pertaining to business travel visas, relocation, tax and the general business environment. We’re seeing soaring numbers of investors from the Middle East and Asia come to us for help in securing a Tier 1 Investor Visa and Tier 1 Entrepreneur Visa. I think this shows that Britain is well and truly open for business. We understand how important it is for people from different parts of the world to feel at ease when making their applications – and when they get to the country. Here in Birmingham,
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we are able to reassure Gulf investors that they’re working with legal advisors who ‘get’ their cultural needs. I know how important that is. Making that journey to the UK and to Birmingham itself is now even easier for GCC investors – and they can do it with an airline they know well. Emirates Airline added a second A380 to its Dubai-Birmingham route in 2017, increasing capacity to over 1,200 passengers every day. Some of the Gulf’s biggest firms have already made the journey. Saudi Arabia’s largest company, the diversified manufacturing firm, Saudi Arabia Basic Industries Corporation (SABIC), has its UK headquarters in the Birmingham suburbs. During a visit to Birmingham, the UAE’s Sheikh Sayed Ali Hashmi, who oversees the UAE legal system, said that Birmingham’s diversity was an attractive prospect for investors in the Middle East. It’s also notable that investment in Birmingham is coming from all corners of the globe, providing Gulf investors with international opportunities from a Birmingham base. Recent examples include one of North America’s biggest engineering and construction firms, Burn & McDonnell, which is opening its first UK office in Birmingham in the city.
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// COVER STORY
CHANGE FOR
SUC C E S S One of the UAE’s construction giants, Arabtec, is taking cautious steps towards creating a sustainable future for the company, according to its group CEO, Hamish Tyrwhitt
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n November 2016, Hamish Tyrwhitt was appointed as the group CEO for Arabtec Holding and entrusted with the task of turning around the fortunes of one of the UAE’s biggest contracting companies. After facing a string of losses for consecutive months, a streamlining of operations was needed to bring around the company’s financial performance to green. And Tyrwhitt got into action from day one itself.
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He remarks: “When we look in the region, we have been involved with the construction of some of the incredibly iconic projects, not just in the UAE but the entire GCC. We went back to our basics and started focussing on what we are good at – being a contractor. It’s an ongoing process and our project selection is based on our capabilities in our core sectors in key geographical markets.”
Arabtec Construction won an AED416mn contract to build the UAE Pavilion at Expo 2020.
A part of the process began with disposing some of the non-core assets. Tyrwhitt points out: “The reason why we disposed some of our non-core assets was because they were immaterial for the future of the company. They weren’t delivering the kind of results that would contribute positively towards our portfolio. So, the non-core assets that we have disposed was not a part of our future.” The company returned to profitability in 2017 as it recorded AED123mn net profit for the year as compared to AED3.4bn losses in 2016. Revenues also grew in 2017, reaching AED9.14bn, an increase of 12% year-on-year. Tyrwhitt says that companies don’t go from huge loss to profitability with immediate changes. “The quick answer is that we have changed everything; the whole way we approach the market – from tendering to delivering the projects - the focus that we have got on our perWWW.CBNME.COM
The reason why we disposed some of our non-core assets was because they were immaterial for the future of the company. formance, accountability, and company culture. The company is going back to the culture it had in the 90’s – focus on being a construction major. “The industry, as a whole, lags in innovation; it’s something that is disappointing. A lot of our business plans in 2018 will focus on productivity, innova-
tion, and efficiency. We have to be more relevant and efficient. If companies don’t evolve and differentiate themselves from the competitors, there is no sustainable future. So, we see it as our duty to ensure that we innovate regularly.” CURRENT PROJECTS Last month, the construction unit of Arabtec Holding won an AED424mn contract from Dubai-based developer, Damac Properties, to build 916 villas at the Akoya Oxygen project. Emirates Falcon Electromechanical company, another Arabtec subsidiary, will carry out mechanical, electrical, and plumbing work for the project. The project entails construction of units in phase six of Damac's Akoya Oxygen master development, comprising a built-up area of approximately 148,000sqm. Work commenced in March and will take 22 months to complete.
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The same subsidiary is also working on Dubai Properties’ Villanova project, where the contractor is constructing the project’s Amaranta and La Quinta phases. The project works are supposed to be completed within a schedule of 28 months. Tyrwhitt says: “Across the group, we have a portfolio of almost 100 projects. One of the most significant ones that we have handed over in the last few months was the Louvre Abu Dhabi. We are working on villas from Fujairah to Yas Island in Abu Dhabi and with wellknown developers like Dubai Properties, Aldar, Emaar, and Damac. So, our portfolio is pretty evenly spread across the residential, commercial, and socioeconomic infrastructure.”
Currently we have a great team in place and not flagging any major changes in the near term. The contractor is also working on the AED416mn contract to build the UAE Pavilion at the Expo 2020 Dubai. The 15,000sqm pavilion will be located opposite Expo 2020 Dubai’s central Al Wasl Plaza. The upper floor of the pavilion spans an area of 2,000sqm while the mezzanine floor will have an area of 662sqm. The ground floor, with gardens and parking spaces, sprawls over 13,300sqm. Another 3,000sqm will be set aside for a plaza level and related facilities. The pavilion’s design and construction aim to achieve the highest Leadership in Energy and Environmental Design (LEED) rating. In a joint venture with Consolidated Contractors Company (CCC) and TAV Construction, Arabtec Holding is work34
A JV of Arabtec Holding, CCC, and TAV Construction is working on the Abu Dhabi Midfield Terminal.
ing on the Abu Dhabi Midfield Terminal. Tyrwhitt mentions: “The Midfield Terminal will be completed in June 2019. It’s a significant project for the region as well as for Abu Dhabi. We are totally focussed on ensuring that it’s a success for all stakeholders. The project is now progressing very well.” But all has never been rosy for the contractor in Saudi Arabia. Tyrwhitt remarks: “The projects that we work on are sometimes being done directly as Arabtec Holding or through our other operating companies. In some of the countries that we operate, we work in joint ventures (JV). In Saudi Arabia, we entered into a JV with Saudi Binladin for jobs, but those didn’t materialise in the end.
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“Everybody is aware of the various challenges that are taking place in the Saudi market. Further, when we take up more jobs in KSA, we will simply go forward as Arabtec and not necessarily with any JV partners.” But Tyrwhitt believes that outside of the UAE, Saudi Arabia is the [most] exciting market for Arabtec presently. The contractor is working on some key projects in Saudi Arabia, including the 380 villas for Saudi Aramco, that they handed over recently. FUTURE OUTLOOK While restructuring still continues, Tyrwhitt says that the goal towards a brighter future is clear. “We need to
Arabtec Construction worked on the Fairmont Abu Dhabi.
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have the right people at the right time for the right projects. We can’t have people that are holding us back for the necessary evolution; to put it in simple words, change or be changed. I want to ensure that we get the right people in to deliver the work. “As a company, we would not have been able to achieve what we have achieved in the last 12 months if we didn’t have the right people on board. One of the first things that we worked on as a team with the support of the board was ensuring that we have the right people in place. “There will always be changes and evolution. We are constantly dealing with transition and changes in expertise. Currently, we have a great team in place and not flagging any major changes in the near term.” Divestments are an important part of the strategy and as Tyrwhitt mentions: “Change never stops and any step that is taken is always towards the betterment of the company.” He opines: “There will always be divestments; people sometimes ask me when is change going to stop? If companies don’t continue to evolve and make themselves relevant, they go extinct. We are constantly looking at opportunities to grow organically and also to potentially divest when the time is right. In our portfolio, we want to have operating companies which has the ability to win and secure profitable projects.” Selecting the right projects will always be a priority, Tyrwhitt says. “Our backlog is just over AED17bn. The whole construction sector has a lot of work to do in collecting receivables and that remains a major focus for us as well. Going forward, we will be focussing on clients who pay us on time.” In addition, the contractor also wants to focus on the right customers in 2018, to whom the company can provide quality professional services. Tyrwhitt concludes: “The key markets for us will be the UAE, KSA, Bahrain, and Egypt. Overall, the UAE will always remain the main market for us to bid and deliver work.”
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// CIF 2018
FORUM 2018 The Construction Innovation Forum 2018 focussed on the current topics of technology solutions for the growing infrastructure projects in the region, the increasing benefits of BIM to tackle the challenges in MEP, and the sustainability factor in HVAC in the GCC. More than 150 people attended the forum, which took place on October 27, 2018, at the W Dubai Al Habtoor City. The sponsors for the event included reputed industry names like Cimolai Rimond, du, ARADA, Azizi, Daemaar Group, Cundall, ASGC, Bentley Systems, and Ashrae Falcon Chapter. The forum bought together the cream of the region’s construction industry and presented an ideal platform to network and discuss the factors shaping the sector’s future. Although the panellists and the attendees agreed on the significant challenges facing the sector currently due to the lacklustre oil prices, they also acknowledged the fact that there were enough reasons to be cheerful about the factors like the Expo 2020 supporting the growth of the economy. Antonio Costa, director of large enterprise and government marketing from du, opened the forum with his welcome address.
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// CIF 2018
KEY NOTE SPEECH
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he keynote speech was delivered by HE Majida Ali Rashid, assistant director general at the Dubai Land Department (DLD). Majida also serves as the senior manager of planning and organisational development, strategic advisor, and head of the real estate investment management and promotion centre. Her keynote speech began with the activity and achievements in the Dubai 38
real estate market in 2017. “A total of 90 projects were completed, while 150 projects worth AED82bn were registered in 2017 alone. “There has been an optimistic mood in market since the beginning of 2018, and a strong demand was observed from developers to deposit the 20% escrow of the total value of the future projects they intend to launch, as it enhances investor confidence in real estate
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FORUM 2018
development projects. Our main aim lies in attracting the investors from all over the world, establishing Dubai as the preferred place to live, work and visit.” She also touched on the technology side, where she mentioned the recent completion of the first phase of the building classification project, which was launched earlier in 2015 as an initiative to survey real estate projects across Dubai.
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// CIF 2018
PANEL: TECHNOLOGY FOR INFRASTRUCTURE
From global EPCs to contractors, everyone today needs technology for the growing infrastructure projects; and the GCC is no different. The Middle East is undergoing an infrastructure boom with all the new and upcoming roads, highways, and bridges. Dubai’s Roads and Transport Authority (RTA) has said it aims to complete key infrastructure projects worth $871mn in 2018, including the upgrade of road networks around Expo 2020 Dubai site and the Route 2020 project. In the first panel of discussion at the Construction Innovation Forum 2017, experts addressed the various options of software solutions being used for the same in the region. The discussion, 40
which was moderated by (extreme right) John Taylor, chief operating officer from SITECH Gulf, included (from left to right) Raguram Jayaram, BIM consultant from Bentley Systems; Christopher Venemore, civil infrastructure director from Aecom; Eng Shafia Alkheyaili, civil engineer – consultants, Roads Department, Ministry of Infrastructure Development; and Ziad Makhzoumi, advisor to the board, Drake & Scull. Commenting on the topic, Makhzoumi remarked: “You have to show what technology can do for the company, and not just ‘discuss’ what it can finally do for you.” Pointing out the role of technology and cloud, Jayaram said: “Technology
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FORUM 2018
allows you to exchange information in a better way, thus saving time. Everybody can share, track and analyse data, and our software help with that. Adoption of cloud is revolutionising how we deal with infrastructure projects.” Eng Shafia remarked that the ministry is currently working on a robot that can plan, design, and check designs for errors. “Instead of 100 engineers reviewing drawings, we have one or two doing the same, thanks to technology. We're able to balance both time and efficiency.” Venemore concluded: “The market and the clients are driving us to do better work. To win quality business, we have to design right from the scratch using the latest technology.”
PARIS
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// CIF 2018
PANEL: BIM FOR MEP CHALLENGES
In the second panel of discussion at the Construction Innovation Forum 2018, experts talked about Building Information Modeling (BIM) and how it is currently the most widely-used technology globally available to structure project information. Co-ordinating MEP layout and design during construction can involve significant challenges. The panel, moderated by (extreme right) Richard Stratton, managing director ME from Cundall, included (from left to right) Craig Garrett, project technol42
ogy leader from BuroHappold; Andrew Darlington, BIM Manager at Ramboll; Arsanious Abtnago, technical engineer from ASGC; Alan Haslop, sales director strategic accounts from Aconex; and Sameer Daoud, chief development officer at Drake and Scull. Abtnago said: “The most important thing for the client to understand is what really needs to be implemented, and what information is important. If BIM needs to be efficient, the client needs to understand what he needs from it.”
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FORUM 2018
Haslop agreed and remarked that everyone talks about BIM but not everyone is adopting it. “There's a bunch of tech out in the market. For any tech to work, it has to be simple to use, much like Facebook, LinkedIn, etc and available to all supply chain stages.” Darlington opined: “There have been instances where companies work with BIM without even realising it. They design the 3D models and then print it to work with it conventionally.”
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// CIF 2018
PANEL: SUSTAINABILITY IN HVAC IN GCC
The total estimated HVAC spend on construction projects in Dubai is approximately $1.5bn and is growing in line with the values of the contracts awarded in the urban construction sector, according to recent reports. Demand for smart, innovative, and sustainable cooling solutions is increasing in the region owing to the large number of projects being announced. The panel, moderated by (extreme right) Phillipa Grant, division manager 44
at AESG, featured (from left to right) Dinesh Rupani, divisional manager from Leminar; Nigel Eckersall, director design and development, VX Studio; AR Sureshkumar, general manager – projects and business development, Voltas Ltd; and Nabil Shahin, sales unit director from Daikin MEA. Shahin said: “The variable refrigerant flow (VRF) system has become popular of late, which understands heat load requirements and supplies the required capacity.”
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FORUM 2018
But Sureshkumar disagrees. “Personally, I'm not a big fan of VRF systems. I prefer medium range systems. VRF is simply an interim solution, and we need to think beyond that.” Rupani remarked: “Seasonal conditioning is another vital factor that can help sustainable cooling systems.” Eckersall concluded the panel saying: “One regulation supports another-- fireproof facades help manage air conditioning for a building.”
1 – 3 May 2018 www.automechanikaDubai.com
The largest international trade exhibition for the automotive service industry in the wider Middle East Some compelling show figures: 1,955 Exhibitors 30,322 Trade Visitors 25 Official Country Pavilions
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// CIF 2018
FORUM Gallery
FORUM 2018
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// MACHINERY & VEHICLES
MUSCLE & MIGHT Our monthly review of the workhorses of the construction industry
50 DOOSAN BOBCAT PREVIEWS ITS MACHINES FOR INTERMAT 2018 56 VOLVO CE LOOKS AT THE CONSTRUCTION INDUSTRY’S TROUBLED HISTORY WITH PRODUCTIVITY 58 FORD TRUCKS TALKS ABOUT INVESTING IN TALENT AND TECHNOLOGY FOR ITS AFTERSALES OPERATION 60 MAN BRINGS ITS CUSTOMERFIRST PROGRAMME TO THE MIDDLE EAST FOR THE FIRST TIME 64 MERCEDES-BENZ TRUCKS MENA TAKES CBNME ON A TOUR OF THE NEW ACTROS AND AROCS 48
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// FEATURE
BACK TO THE FRONT Gaby Rhayem, regional director for Doosan Bobcat, previews its machines at Intermat 2018
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ntermat’s return to Paris this month is the year’s biggest opportunity to bring together the construction industry. While historically the event has been focused on the French market, it has broadened its horizons in recent years and has arguably been the most proactive of the world’s three largest construction equipment events to attract the Middle East visitors. Among those exhibiting at the event will be Doosan Bobcat, the global manufacturer of a huge variety of machines and portable power products, including the famous Bobcat range of compact loaders and backhoes. Doosan Bobcat is a manufacturer that has fully embraced the opportunity to invite and host buyers from the region in the past and Gaby Rhayem, regional director Middle East and Africa for Doosan Bobcat EMEA, tells CBNME that it will once again highlight its offering in the market in Paris. “Doosan Bobcat will have a dedicated Middle East and Africa (MEA) area, showing products such as our new Bobcat backhoe loader and Doosan Portable Power (DPP) generator ranges for the MEA at Intermat for the first time,” he explains. “We will also have compressors from Doosan Portable Power that we only sell in MEA, where we lead the market.” Rhayem adds that it is the first time that the company has displayed machines that are dedicated to - and only sold – in the MEA region. “This covers products from both Bobcat and DPP dedicated to MEA,” he states. “So, there is a flavour to this Intermat that is definitely MEA for us. Our Bobcat and DPP dealers will invite many customers from MEA to attend the event, and we will be there to dedicate time to them inside and at the demo area outside.” Rhayem explains that Intermat is an important event for its customers to attend as Bobcat and DPP will display their entire ranges of loaders, mini-excavators, compact loaders, telehandlers, generators, and compressors. “They will be able to see the new products, meet with top management, discuss every opportunity available from us, see different solutions for their
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// FEATURE
businesses, and see many machines and applications we offer,” he remarks. During his interview with CBNME, Rhayem reveals that Intermat comes following a rollercoaster year for the equipment industry. “2017 was difficult with another drop in the industry for most products sold in the Middle East,” he recalls. “In contrast, Q4 showed a good recovery at all levels and the year ended with only a small drop overall. 2018 looks promising and first indications are good in many countries despite some areas of instability, but trust is there. We should see a better industry trend in 2018.”
“2018 looks promising and first indications are good in many countries despite some areas of instability, but trust is there. We should see a better industry trend in 2018.”
NEW LAUNCHES Last month, the Bobcat brand formally launched a range of backhoe loaders for sale in the Middle East and Africa and all will be on show at Intermat. Comprising four models – the B700, B730, B750, and B780 – the Bobcat backhoe loader range
offers a choice of different specifications for diverse applications in construction, utility, rental, roadworks, demolition, excavation, landscaping, and agriculture. All four models are powered by the Perkins 1104C-44T 4.4l engine that the manufacturer describes as highly ef-
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ficient “with direct fuel injection and a best-in-class output of 74.5kW (100 HP) of power at 2200RPM and maximum torque of 408Nm at 1350RPM, providing more than enough muscle for the most demanding applications while delivering low operating costs due to low fuel/oil consumption.” These are machines designed to accommodate the unique requirements of the region and the steadily growing demand for a better return on investment in the fleet of contractors and rental companies. A sign of its confidence in the reliability and durability of the components and the design of the powertrain in the backhoe loaders, the company is also a standard two-year powertrain warranty, ‘providing extra protection and peace of mind’. The Perkins engine itself features a filtration system designed to offer a longer life, and its single-side service components mean that maintenance and daily checks are easy to carry out as they are on the rest of the machine. In its documentation for the machines, Doosan Bobcat says that the Bobcat backhoe loaders are designed to provide easy and quick access to the engine compartment and other locations to service and maintain components at ground level by simply removing the side panels. “Refuelling of the tanks is also accomplished from ground level and the tanks are protected with a lock matching with the ignition key,” says Bobcat. All four backhoe loaders are highly manoeuvrable and can easily negotiate obstacles on job site. On each model, there is a choice of four-speed synchroshuttle, powershift or auto powershift transmissions in the different models to meet various applications including those requiring a significant amount of directional changes on site. Gear shifting has been smoothed and is precise to help maximise fuel efficiency, but the loaders are no slouches either and offer a top speed of 40 km/h. Extra added features/options include return to dig, ride control, and more for increased productivity. On-site productivity is driven by an open centre hydraulic system on all the
The 19th edition of the International Trade Fair for Tools, Hardware, Materials and Machinery
2 – 4 April, 2018 Dubai, United Arab Emirates
The region’s premier trade show catered to construction, fabrication and other technical industries. For more details visit www.hardwaretoolsME.com/visit3
// FEATURE
models although the high flow capacity of tandem gear pumps is rated at 136 l/min in the B700, which is lower than the 154 l/min of the B730, B750, and B780 models. An unloader valve is featured as standard on all the models as is the electrohydraulic differential lock, although a limited slip differential is used on the B730 and B750 models. According to Bobcat Doosan, cabs are easy to enter and exit and the backhoe loaders provide a spacious and comfortable operator environment – the B700 and B730 offer a choice of an open canopy or an enclosed cab, whilst the B750 and B780 are all equipped as standard with an enclosed cab. The cabs have been designed with a fully adjustable operator’s seat and all the controls are within close reach. This is intended to ease fatigue and offer greater comfort and more productivity. Likewise, a tilt-able steering column; a high performing optional HVAC system; and “excellent all-round visibility” for the operator are added plus for operators in the region. Bobcat also believes they will be able to learn to operate the loaders very quickly with simple, ergonomic controls, clear dashboard layouts, and audible and visual warnings for guidance. Beyond the backhoes, visitors to Intermat will be able to get an overview of Doosan Portable Power’s newly launched range of four generators. Rated from 20-60 kVA, they are available as both 50 Hz and 60 Hz versions in the region and 54
the company believes they could find a wider audience beyond the construction and rental sectors and provide home standby power as well as telecommunications and back-up power for small businesses. The four new generators – the G20, G30, G45, and G60 – provide prime power outputs of 20, 30, 45, and 63 kVA, respectively, and all four units are available as open units (XF) or sound attenuated versions (XW). The equivalent 60 Hz versions are also available in a range of voltages between 220V and 480V (Phase to Phase). Like the backhoes, there is a great deal of commonality between the generator models with them sharing many of the same design characteristics including their well-proven Cummins diesel engines. Doosan Portable Power estimates that the standard frame-fuel tank configuration of the generators ensures autonomy of at least 15 hours at 75% of the load, “allowing users to work regular shifts without refuelling concerns”. The MENA region is expected to experience stronger growth this year and Intermat is an early opportunity for the industry to start feeling more positive about its immediate future. With a line-up of new machines and products, Doosan Bobcat could be well-positioned particularly if the market behaves as Rhayem predicts. Before concluding the interview, he teases that there could be more to come: “We have just launched the backhoe and generator ranges… and we will keep some great surprises for this year for sure.”
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A NEW RANGE OF BACKHOE LOADERS According to Doosan Bobcat, its new backhoes launched in the region offer “premium performance with powerful breakout forces, strong full lift capacities, and enhanced load over height and reach to meet the most demanding material handling jobs”. The B700 is an entry-level machine which includes many of the features of the next model in the range, the B730 - it is driven via a synchroshuttle transmission; it has 'Cab and Canopy' and '2WD or 4WD' options; and it has a single loader bucket cylinder with a full cylinder diameter to increase breakout force and reduce maintenance costs with fewer hoses and fittings. The B730 is driven through a standard powershift transmission and controlled by mechanical levers this model is equipped with 18in front tyres and has two-wheel steer. Double loader bucket cylinders provide superior breakout force and reduce maintenance costs by using a bolt type cylinder head design. The B750 has the same features as the B730, except for 20 in front tyres and a hydraulic joystick control system. The B780 has the same features as the B750 and is driven through a standard auto powershift transmission, producing a highly manoeuvrable, 4 equal-sized wheel backhoe loader that can be steered using three different modes: 2-wheel steer, 4-wheel steer and crab steer. The low-effort loader joystick controls in the B750 and B780 provide precise control and superior comfort to enable operators to work for longer periods and increase productivity. Superior ground clearances of 385mm in the B780 and 400mm in the B700, B730 and B750, together with a 25° back ramp angle, provide excellent climbing performance over steep slopes. There is also choice of general purpose or 6-in-1 buckets or other optional equipment to enhance both versatility and productivity.
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MORE INFO ON WWW.BOBCAT.COM Bobcat is a Doosan Company. Doosan is a global leader in construction equipment, power & water solutions, engines, and engineering proudly serving customers and communities for more than a century. Bobcat and the Bobcat logo are registered trademarks of Bobcat Company in the United States and various other countries. © 2017 Bobcat Company. All Rights Reserved.
// PLANT MANAGEMENT
FIXING PRODUCTIVITY PROBLEMS
Volvo CE looks at the construction industry’s troubled history with productivity
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ven the smallest construction projects are multi-disciplined events that involve hundreds of individual actions. When scaled up to mega project size, managing the sequencing of man, machine, and material, so that the right things are done at the right time and place is a logistical headache that the industry has been grappling with for generations. Construction is improving – but its productivity improvements are far slower than the wider economy. Part of the problem is that each construction site is unique, with the main players only coming together for that particular project, before moving off to the next job. This has, in the past, 56
discouraged a more joined-up approach. So, hindered as it is by project management inefficiencies, contractual misunderstandings, and often a lack of communication, can the industry capitalise on growing global investment and learn a few productivity-boosting tricks from the wider world? When budget carrier, Southwest Airlines, found it was already in the lead in its refuelling processes compared to other commercial carriers, it was forced to look elsewhere for inspiration to further reduce its turnaround operations. Most of the firm’s aircraft were grounded for an average of 40 minutes for refuelling between flights, creating what the company felt were unnecessary costs
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and productivity losses. It found inspiration in Formula One – experienced in turning around a racing car pit stop in as little as two to three seconds – and adopted a similar process. This eventually allowed crews to refuel an airplane in just 12 minutes. This sort of lateral benchmarking shows how construction can make inroads in productivity savings. One of the keys to improved productivity is to ensure the entire supply chain is aligned in its aims. Setting welldefined goals means projects are more likely to meet schedule and cost targets. Suppliers are more likely to engage with an operation standard that they have had a role in establishing, which in turn,
“Setting well-defined goals means projects are more likely to meet schedule and cost targets.”
leads to fewer mistakes, better communication, and a more collaborative approach to problem-solving. UK utilities company, Anglian Water, for example, was facing increasing demands to reduce costs while delivering the same level of service. So, in 2005, the company began an incentive program where the strategy and cultural ethos had to be agreed collectively, from sub-contractors to equipment suppliers. As a result, they beat their targets – achieving more than 50% carbon emission savings and a 40% reduction in construction time. Another key trend for 2018 is offsite construction. Google and Starbucks are already big investors, and now hotel WWW.CBNME.COM
chain, Marriott International, is taking the process into the mainstream by employing a band of offsite manufacturers as part of its global design strategy. Offsite construction and prefabrication not only helps make up for the short supply of skilled workers across the supply chain – by absorbing up to 60% of a project’s labour requirements – but also jumpstarts productivity by reducing timescales and lowering build costs. Productivity improvements at companies are often defined by the technology employed, and even on a small scale, a failure to adapt to new tools can have an adverse effect, even at a national level. If a fifth of small businesses in a developed country like Great Britain are still using fax machines, according to a survey by Enterprise National, is it any surprise the British economy is suffering a poor productivity record? While artificial intelligence (AI) may seem like a distant prospect, tech startups are recognising that aspects of machine learning technology can help them break through into the mainstream. One such example is Slack, which is threatening to shake up ‘traditional’ email by
using AI to intuitively group messages by topic and highlight which unread messages are of most importance, cutting down on the time spent manually filtering communications. At the other end of the scale, Amazon is using a new technology to ensure productivity improvements keep a fast pace at every level of the company. Workers whose job is to fulfil orders are kept constantly moving, thanks to handheld devices that show them what each item looks like, where to find it, and how to reach it as quickly as possible. It can, however, make for a strenuous work day in which every second is accounted for. While this is an extreme example of the ways in which technology can push productivity to its limits, digitisation can be used to make workers lives a little easier. Increasingly, this is becoming a growing trend in construction. Volvo Construction Equipment’s onboard machine telematics system CareTrack, for example, is designed to provide updates on fuel status, idle time, and logged hours – even how the machine is being used. This helps prevent unscheduled downtime and improves efficiency from a cost, carbon, and time perspective. Construction demand continues to grow, and productivity can play a vital role in making the most of these opportunities. To thrive, the industry must shake up old processes, be open to change, and adapt to new technologies. Even incremental improvements will save time and money, so companies that invest in the future will start to reap the productivity gains today.
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// TALKING POINT
TIME FOR UPTIME
Ford Trucks talks about investing in talent and technology for its aftersales operation
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ord Trucks always aims to provide premium and well-rounded support when it comes to its after sales service. Uptime is the first priority of Ford Trucks, so it is regarded as highly important to keep the trucks on road for as long as they are required. Globally, this seamless support is delivered by Ford Trucks’ network of more than 82 dealer locations on important international routes in Eastern Europe, Middle East and Africa, Russia and CIS countries. All the service centres are equipped with latest technology diagnostics and special tools to do the required job in an efficient way. In the Middle East, Ford Trucks aftersales services are represented by mobile services and a wide network of service centres in KSA, UAE, Qatar, Oman, Bahrain, and Kuwait by official Ford Trucks dealers. This ensures Ford Trucks and its dealers can serve regional customers with a complete support programme, including vital on-the-spot repairs that are dedicated to maximising fleet operator and owner uptime. Ford Trucks is also investing in the region, adding to its extensive workshop locations with the inauguration of further facilities in the UAE, 58
KSA, and elsewhere. Only original Ford Trucks parts, which are manufactured to genuine specifications, are authorised to be used for any required services at its workshops. Securing spare parts can be a major issue for the region’s fleets and Ford Trucks is setting new standards in availability for its clients. 95% of parts are available at the manufacturer’s warehouse and thanks to Ford Trucks’ operation system, it is possible to send any required item to its dealer workshops within 48 hours. Understanding the needs of fleets is central to Ford Trucks’ approach to the market and the Ford Academy invests in continuous trainee programmes to enhance its comprehensive range of support services. All Ford Trucks technical teams and parts personnel have been carefully trained to meet the company’s meticulous standards in order to ensure every individual receives a high level of service. Ford Trucks is furthermore closely monitoring the operations at the service centres of its dealers in order to analyse their productivity and efficiency. Through the CSI (customer satisfaction index) programme, which has been established across the GCC markets, Ford
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Trucks dealers have dedicated teams to get customers’ feedback and to measure their performance on a regular basis. Efficiency and productivity are increasingly important for the fleets in the region with many of them utilising telematics and Fleet Management Systems (FMS). Ford Trucks’ own universal infrastructure system can be seamlessly integrated with any FMS, but it can also equip its own sophisticated - Filobil which enables customers to follow each truck’s location, vehicle condition, fuel consumption, driver performance, and receive daily reports for critical up-todate data on operational costs. Filobil is designed to maximise fleet flexibility and Ford Trucks will work with clients to put together an FMS service payment plan that fits with their budgets. Finally, with all information related to each truck, including components, service records, trucks chassis numbers, and other details linking each product stored in its detailed database from the day of procurement, Ford Trucks provides fleets wherever they are based in the region with reassurance through its two-year bumper-to-bumper unlimited kilometre guarantee on any purchased product from its range.
// TRAINING
INTELLIGENT SERVICE Why MAN is bringing its award-winning CustomerFirst programme to the Middle East for the first time
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his year’s MAN Middle East After-Sales Conference was held in Muscat, Oman, in March 2018 and brought together representatives of importers from the 14 countries of the Middle East region as well as executives from MAN’s German headquarters and its regional office in Dubai. 60
Typically, these conferences are an opportunity to review the state of the market, highlight some key trends, and network. But this year’s event was different. At the top of an agenda addressing MAN’s evolving role from manufacturer to intelligent solutions provider, delegates were given an insight into
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the company’s latest customer experience concept ‘CustomerFirst’. The programme was developed by MAN Truck & Bus to systematically record data on customer satisfaction and improve service quality. At its heart, the initiative uses customer feedback to monitor the performance of MAN and its distributors on a
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// TRAINING
regular basis and effectively. The scheme ensures that they are constantly delivering on their promises to customers over the days, months, and years following the initial purchase of a vehicle. If MAN or its dealers are falling short, then the solution can be found early and quickly. “The primary message of the conference this year was to focus on the latest Customer Experience Concept from MAN CustomerFirst. Customer requirements are important, so we want to react proactively and offer tailored solutions to meet their needs,” remarks Dr Richard Brown, head of after-sales, MAN Truck & Bus Middle East. CustomerFirst has already had a positive impact in other markets for MAN, leading it to be awarded at the German Excellence Awards 2018 in February in the ‘Products & Services – Customer Support’ category. The award is presented every year by the German Institute for Service Quality 62
An integrated offering is the key for future service contracts with every vehicle, we provide piece of mind, so our customers can focus on running their businesses. and the magazine, DUB Unternehmer, to companies and entrepreneurs who have stood out thanks to their excellent products, services, campaigns, or initiatives. Franz Freiherr von Redwitz, managing director, MAN Truck & Bus Middle East, says that the programme is part
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of a suite of integrated after-sales solutions to ensure MAN is never too far away from a customer’s journey. “Customers are more and more empowered and are looking for integrated solutions, end-to end and not just the product itself. An integrated offering is the key for future service contracts with every vehicle, we provide piece of mind, so our customers can ‘focus on running their businesses’,” says von Redwitz. Dr Richard says it is essential to introduce the CustomerFirst programme for the first time in the Middle East. “Our focus in the region is to be unified and offer a consistent experience across different countries,” he says. “Through our close cooperation with regional partners, we can focus on offering products tailored for the regional requirements. The Middle East is different but unique and together with partners, we need to see how to continuously innovate and customise our product offerings so we can be ready for the future.”
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// TRUCKS
A
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LEGACY Marc Legeay, GM, Mercedes-Benz Trucks MENA, takes CBNME on a tour of the new Actros and Arocs
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ercedes-Benz Trucks took to the beaches of Dubai in February for a spectacular launch of its new generation of trucks for the Middle East and North Africa markets - and if first impressions count most, then the famous German truck brand’s new Actros and Arocs are off to a great start. “The feedback we have received on the new products from our customers and business partners is extremely positive,” enthuses Marc Legeay, general manager, Mercedes-Benz Trucks MENA as he looks back on the event. Following their Dubai debut, attention now turns to introducing the new Actros and Arocs across the region with
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the first in a series of national launches by its partner JIPCO in Saudi Arabia taking place shortly before Legeay’s interview with CBNME. Considering Mercedes-Benz Trucks’ reach across the vast territory, it is unsurprising to hear him add that the events will need to be held until the end of 2018 to fully roll-out the new vehicles. While talking, Legeay highlights that Mercedes-Benz trucks are renowned for their dependability and retaining their value in the region. This has been demonstrated in the past year by the company celebrating both the 20th anniversary of the Actros as well as honouring long-term fleet owners through its mileage millionaire campaign. With
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one Actros racking up 2.3 million km on the clock, CBNME asks Legeay whether it is difficult to convince people to buy new trucks considering the reputation its trucks have for lasting a long time?
// TRUCKS
“That’s a great point. Mercedes-Benz Trucks enjoy an excellent reputation here in the region as a hallmark for quality and reliability,” remarks Legeay. “This is attested by the high resale values and the many Mercedes-Benz trucks from older generations you encounter, which are still doing their job, day in day out. Now, with the new Actros and Arocs, we are taking the legacy of Mercedes-Benz into the future. We are sure that many of our customers will ultimately be convinced by the latest benchmarks set by the new Actros and Arocs in terms of reliability, efficiency, comfort, and safety – and of course in terms of TCO, where the new Actros and Arocs excel. We also assume some will just not be able to refrain from the fantastic new design.” Legeay explains that with the new launches, Mercedes-Benz Trucks is offering fleets in the region a clear choice of state-of-the-art truck. What they opt for will ultimately depend on the type of operation they own. “The new Actros is made for longhaulage transportation and distribution tasks, providing highest reliability and efficiency for our customers,” he explains. “When operations get tougher, we have now with the new Arocs a dedicated and supremely robust product offer for construction and off-road applications, which includes the all-wheeldrive models.” The engineers at Mercedes-Benz Trucks not only designed and manufactured the vehicles to meet the demanding conditions of the Middle East but also brought them into the region to endure months of testing prior to launch. The rigorous process has ultimately created two heavy duty trucks that should be able to pound the sun-baked roads and sites of the regions for many years ahead. “We tested extensively over the last couple of years at our test center in Abu Dhabi,” says Legeay. “More than six million test kilometres for the new Actros and Arocs in the UAE prove the highest standards of quality and reliability.” The older Mercedes-Benz trucks serving in the region’s fleets may demonstrate the German truck-maker’s ability to make vehicles that will run but the 66
Marc Legeay, GM, Mercedes-Benz Trucks MENA,
Over the last years, we have witnessed an increase of diesel prices in many Middle East markets, which means fuel efficiency becomes increasingly important. new generation of trucks have been developed with the changing demands of haulers and operators in mind. Fuel and operational costs are rising and Legeay says this is having a profound effect on the buying habits of fleets in the region. “Fleet owners here are focusing more and more on the Total Cost of Ownership (TCO), seeking for the highest profitability of the overall vehicle lifecycle. Over the last years, we have witnessed an increase of diesel prices in
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many Middle East markets, which means fuel efficiency becomes increasingly important,” he says. “With the new Actros and Arocs, we are providing a highly attractive product and service offer for TCO oriented fleet customers. Further significantly reduced fuel consumption, tailor-made service, and extended warranty packages are just a few aspects paying into the overall attractive TCO for the new Actros and Arocs.” As Legeay suggests, the two new trucks are packed with the very latest technology; boasting the best in the company’s engineering expertise to specifically keep the TCO as low as possible. Both come equipped with the latest fully automated Mercedes PowerShift 3 transmission as standard which is – exclusively to the market – also available in a 16-speed variant for demanding operations. “With its intelligent shifting strategy, Mercedes PowerShift 3 ensures fast and precise gear changes, increasing the safety and comfort level. Another highlight is the wide range of safety features available with the new truck generation, and of course, the Active Brake Assist 4, a radar-based emergency braking system,” he explains. “It’s the first and only system available for trucks which detects not only static and moving obstacles
in front of the vehicle and initiating an emergency braking down to standstill; it also detects obstacles crossing the truck’s path such as pedestrians.” Demonstrating an increase in the interest in the region’s fleets to use technology to gain greater control over their costs, Legeay says that Mercedes-Benz Trucks is seeing more fleets request access to its FleetBoard telematics system – which is again available for those wanting to make the most of their new trucks. “Telematics systems are key when it comes to monitoring and managing your fleet. With the cost pressure on one hand and the ambition to increase profitability, safety, and efficiency, our FleetBoard offer is proving that telematics systems are becoming more and more important, especially for fleet customers here in the region,” he comments. “The key here is that FleetBoard does not only cover tracking and tracing – driver performance monitoring for safe and efficient driving as well as service uptime are paramount features, maximising the profitability. Major fleets in the region are using FleetBoard already for years and they acknowledge the benefits of the system for their operations.” According to Legeay, MercedesBenz Trucks continued to strengthen its leadership position in the premium heavy-duty truck segment in the MENA region in 2017 despite macro-economic challenges in some of the key markets. He cites the closing of a major deal with Saudi customer Al Khaldi for more than 500 trucks including an after-sales package as one of the highlights of the year, “underlining the trust our customers have towards our brand and products,” he adds. He expects this momentum to be maintained in 2018 following the introduction of the new Actros and Arocs trucks across the MENA region, particularly in the UAE, as contract awards are announced in the lead up to Expo 2020 Dubai. “We are offering the new Actros and Arocs with engines complying with Euro III, IV, and V standards. All engines come as in-line six-cylinder, providing excellent reliability, efficiency, and performance. The OM460 engine (Euro WWW.CBNME.COM
III) with its proven pump-line-nozzle injection system is characterised by its exceptional robustness. When it comes to Euro IV/V engines, customers can choose from three different variants with outputs of up to 625hp. All Euro IV/V engines are equipped with the unique common-rail X-Pulse injection system, providing outstanding fuel efficiency. The Euro IV/V engines also feature Exhaust Gas Recirculation (EGR) and SCR-Technology (AdBlue) for lowest emission levels.” He adds that a raft of new services is being launched around the new trucks that are complemented by the change of emissions in the UAE. “Customers, choosing the new Actros and Arocs with a service contract offer, can now enjoy extended flexible maximum service intervals, further reducing the service cost of the fleet over the lifecycle and providing ‘peace-of-mind’ to the fleet operator. Besides this, tailormade extended warranty packages are available as well as driver training focusing on efficient and safe driving.” With a new generation of trucks coming into fleet operations, Mercedes-Benz Trucks can now afford to focus on serving its customers in the region. Legeay says it is continuing to strive for the best product and service offer in the premium truck segment and exceeding its customers’ expectations in the region. He adds that Mercedes-Benz Trucks is also ‘planning a further expansion of our already wide network of 59 sales and service partners across the region, as well as the extension of our tailor-made customer services offer will facilitate our ambitions’. Looking even further ahead, he suggests that the region could one-day get its own electrically-powered version of a Mercedes-Benz heavy truck. “Mercedes-Benz Trucks has always been an innovator when it comes to new technologies. Now, with the eActros being rolled out in 2018, first to selected customers in Europe, we are proving our competence in the field of fully electric trucks,” he states. “With the region striving for excellence, for hightech and sustainability, why should there not be potential for electric trucks in the long-term?”
MERCEDES-BENZ ON: EURO IV AND HIGHER ENGINES In addition to the choice of two Euro III engines, the new Actros and Arocs are available with three different engines complying with Euro IV and Euro V emission norms. All engines are designed as in-line six-cylinder engines with exhaust-gas turbocharging and charge air cooling for high torque at little more than idle speed. Maximum tractive power levels of from 1,000 to 3,000Nm are achieved by three displacements of 10,7, 12.8, and 15.6l, with a power range from 240kW up to 460kW. An important feature of the six-cylinder in-line engines of the OM 470/471/473 model series from Mercedes-Benz is the unique flexible commonrail X-Pulse injection system with fully electronic control and pressure booster. Whether the OM 470, OM 471, or the OM 473 – all engines comply with the Euro IV or Euro V emissions standard. They feature the latest common-rail injection system and come with exhaust gas recirculation. Exhaust gases are treated with SCR technology with AdBlue injection, as well as a downstream oxidation catalytic converter.
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// EDITOR'S PICK
AN OUTPERFORMER Commercial infrastructure will gain pace in the UAE in the coming years as economic diversification from oil and gas continues to grow, according to recent report by BMI Research
Commercial infrastructure will be the clear outperformer within the broader construction sector of the UAE in the coming years, as economic diversification gathers pace and the various emirates focus on developing higher-value service industries. According to a new report by BMI Research, twin factors will fuel the outperformance of the UAE's commercial building sector in the coming years - in the short-term, Expo 2020 will drive commercial activity in Dubai, while over the long-term, efforts to diversify revenue streams away from oil and into higher value add service and tourism industries will stimulate investment into commercial building projects, particularly in Abu Dhabi. Commercial infrastructure growth will continue to be centred upon Dubai in the short-term, largely due to ongoing construction activity associated with Expo 2020. Though we have longhighlighted Expo 2020 as a key catalyst of higher levels of construction activity, 68
the proliferation of investment pledges relating to the Expo has accelerated over the past year as the deadline nears. In November 2017, for example, Cimolai Rimond Middle East, a joint venture between Cimolai and Rimond, secured a deal to construct Al Wasl Plaza in Dubai. The project is the final major design element of the Expo 2020 site, which will focus around a planned 438ha site, the largest ever created for a World Expo. Located in Jebel Ali, construction at the site is expected to cost between $2bn to $4bn. The site will feature 180 purpose-built pavilions, an underground service rail network, and a photovoltaic solar power canopy capable of producing 50% of the site's power. Work is expected to be completed for 2019. In the long-term, we expect that investment in Abu Dhabi's commercial building sector will help offset an expected decline following the conclusion of Expo 2020. Though we note that Dubai's share of commercial building
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value clearly outstrips that of Abu Dhabi at the present time, we anticipate that Abu Dhabi's share of the pipeline will grow in the coming years as the government prioritises efforts to expand the emirate's economic base beyond oil. Illustrating Abu Dhabi's ambitions in the commercial infrastructure space, its government aims to attract 7.9mn tourists annually by 2030 under the auspices of its Abu Dhabi 2030 Plan, up from 4.4mn in 2016. Furthermore, the emirate hopes to expand its retail and office space to 400ha and 750ha by 2030, respectively, up from 250ha and 150ha in 2013. As such, we are seeing a number of big-ticket commercial projects moving through the construction pipeline that will help sustain elevated growth rates. Given our oil and gas team's expectation that oil is unlikely to rebound to the higher prices of the last decade and a half, we expect similar projects and investment pledges to accelerate going forward.
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GLOBAL INFRASTRUCTURE CONGRESS DUBAI, UAE Spearheaded by HE Dr Abdullah Belhaif Al Nuaimi, Minister of Infrastructure Development, UAE, chairman of the Federal Transport Authority, and chairman of the Sheikh Zayed Housing Programme, the theme of the Global Infrastructure Congress (GIC) 2018 has been set as ‘Built to last – driving engineering excellence through innovation for a more sustainable future’. The congress will be a platform to accelerate, change, and forge relationships in order to close the global infrastructure gap.
INTERNATIONAL PROPERTY SHOW DUBAI, UAE The International Property Show-Dubai is an eminent real estate show showcasing various properties such as homes, villas, flats, apartments, and other plots, where the attendees can invest. It is a great platform that creates investment opportunities and possibilities and enhances one's networking and communication. The visitors are exposed to an array of exhibitors and the show is an interesting forum to get connected globally. The show helps the corporates to increase their profits by investing in lucrative real estate deals. The show is the only event of its kind that allows retail sale and purchases for both local and international properties.
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HARDWARE+TOOLS MIDDLE EAST DUBAI, UAE Hardware + Tools Middle East is a three-day event being held at the Dubai International Convention Centre. It is the region’s only dedicated trade fair for tools, hardware, materials, and machinery. The show represents vital aspects of this ever-growing industry to network with manufacturers and suppliers, find a variety of brands across cost ranges, and evaluate the market. The 2017 edition concluded a successful three days of busy networking, featuring 166 exhibitors and 3,244 exporters / importers, distributors, retailers, contractors, fabricators, and consultants.
INTERMAT PARIS, FRANCE Intermat, the international exhibition for construction and infrastructure, will take place from April 23-28, 2018, at Paris Nord Villepinte, France. The exhibition will host 183,000 visitors and 1,500 exhibitors presenting an offer of equipment, materials and solutions for civil engineering and structural building works. Intermat has adjusted its sector organisation to respond to visitor expectations (more clearly specified sectors, a more efficient visiting experience and greater emphasis on innovation), arranging the event around four activity sectors for optimal clarity. One special feature makes this event unique - an outside demonstration area.