How does ZÜBLIN-STRABAG position itself in the UAE market?
The majority of the group's turnover is generated in Central Europe and through special infrastructure projects around the world. We define ourselves as a niche contractor in the UAE focusing on unique building and infrastructure projects, such as tunneling, rehabilitation works, and so on, which require specific technical skills and expertise.
What qualities define an ideal project for the group in the UAE?
We are highly selective when it comes to the projects we undertake and the companies we work with. One of the defining elements of our work in the UAE is the level of maturity of our clients with respect to both their payment schemes and the engineering challenges they face. Our edge is that we bring significant knowledge, experience, and skills based on more than 100 years of experience in the engineering and construction sectors. We favor clients with an ability to appreciate an international contractor who can deliver quality in a timely manner and brings ideas that provide the best value for money. We are not margin-driven and are used to long-term, stable partnerships. Our relationships with authorities or semi government investors are built on value engineering and trust.
How does ZÜBLIN-STRABAG keep its business model adaptive and resilient in light of the UAE's market cycles?
In the UAE, we are a relatively flexible organization, and we seek to keep our branch office margins as low as reasonably possible. We have a relatively big engineering group in the Middle East, however we also rely on our head office's technology input and the strength of our chain of vendors, suppliers, and subcontractors. Even if we experience payment or contract issues with our clients, we ensure our sub-contractors are paid. This is unusual in the Gulf market but results in our partners preferring to continue working with us. Our technology department in Central Europe also helps us keep costs down by looking for ways to achieve high-quality output in a cost-effective and efficient manner.
How would you assess the evolution of environmentally conscious construction in the UAE?
Environmental sustainability and energy efficiency are major challenges for the future of UAE, and there is a great deal of room for the green building sector to develop. We endeavor to be a market leader in ecologically sensitive projects. We are currently involved in tenders promoting energy storage schemes and zero net-energy buildings focusing on the implementation of stringent international sustainability parameters. For such projects the support of our R&D and Engineering Hubs in Central Europe is essential and we are therefore able to provide, together with our local presence, solutions which are state of the art yet manageable.
What are some of the greatest cost pressures in the UAE?
I have been here for a long time and have seen many spikes in the market. The main problem is that there is little clearance of bad contractors in the market. If the market can correct itself, then prices would be more viable. If there is a high number of competitors compared to the real work available, then there will always be a race to the bottom. Our strategy is to stick to solvent, mature clients so that we can mitigate our risks and keep our organization as lean as possible.
What policy recommendations would you provide to create more stability in the sector?
Companies need to be made more responsible for financial accountability. This would help major clients or the government to establish a few strong partnerships under new contract models such as partnering models with modular programs, allowing the appliance of specific contracting rules for local authorities, semi government entities, or investors. Such schemes can be compared to existing models through scoring systems identifying opportunities and advantages to the employer.
What is your approach toward Emiratization?
We are an international group but we want to rely on resources available within the host country first. In general, we welcome Emiratization initiatives, as they make excellent use of the national talent studying abroad and give them opportunities beyond the public sector. We have employed some Emiratis, and in the long run I am sure they will play a big part in our work.