The construction industry in the GCC is beginning to show signs of a market recovery, according to German firms in the UAE. “We are seeing more and more projects being put out to tender, especially in certain building types such as schools, hospitals, hotels and other infrastructure projects,” says Paul Schneider, General Manager at Al Rostamani Pegel (ARP), Al Rostamani Group’s civil contracting arm. “This has led our company to successfully acquire three new projects during the second quarter of 2012.”
Ralf Stahl, Managing Partner at sustainable landscaping firm Zeoplant, agrees, “In terms of work, 2012 was a difficult year. But when it comes to 2013, we are optimistic because we can see that there is positive movement in the market and it is in the right direction. Long-stalled projects will be revived again. Some new projects have been announced in 2012 and some others will be announced in 2013.”
What are the challenges facing the German companies? “All firms within the construction industry, be they local or international, face the same issue — securing payments,” says Stahl. Schneider adds, “Bids remain extremely competitive, with wafer-thin margins highlighting the fierce price competition that exists in the industry. The challenges are to collect long-overdue receivables from certain clients and identifying experienced and competent human capital.” .
So what are the growth areas in the region? “The GCC presents suitable opportunities for our company, beyond its traditional roots in the UAE, says Schneider, adding that it has recently ventured into Saudi Arabia. “We introduced German innovation and technologically advanced construction systems into the UAE when we started operations more than ten years ago,” says Schneider. “We consider that this will remain a growth area, especially in terms of formwork systems. Other growth areas include the appreciation of skilled labour, where ARP has established a dedicated training centre to provide continual training to its current and expanding labour force.”
“The success of a project relies on the understanding of all the project requirements that are translated into a robust advance planning programme, which also anticipates future risk areas in order to plan for suitable
preventive measures,” adds Schneider.
Stahl says his firm receives many enquiries from road projects. “On the other hand, we are also seeing a lot of work on the hospitality projects side in UAE,” he says. “We are waiting for some updates on certain projects in Saadiyat Island. We also see growth opportunities in Qatar. Many projects are expected to come up for tender next year. While we are not doing any work yet in Saudi Arabia, we are looking for opportunities and hope to have some work on hand next year.”