The Big 5 2010 closed after a successful four day event; now looking to The Big 5 Saudi 2011!
The Big 5, one of the largest events for the building and construction industry in the Middle East, finished on a high after successful four days at the Dubai World Trade Centre (DWTC). The event hosted over 2,500 exhibitors from 70 countries who showcased the latest technology and services from all sectors of the building and construction markets.
The event organisers dmg :: events are now looking forward to its new event, The Big 5 Saudi, that will run from February 27 – March 2, 2011. Andy White, Event Director, The Big 5, says, “We are looking forward to The Big 5 Saudi, our first Big 5 outside the UAE, and the response to this new event has been phenomenal.” The event will be hosted in collaboration with MICE Arabia Group (MAG) supported by the Jeddah Chamber of commerce. To be held at the Jeddah Centre for Forums and Events, over 200 exhibitors from 25 countries will be maximising the opportunity to access the Saudi market, which has an anticipated $420 billion of projects currently underway and an impressive pipeline for the upcoming five years.
In addition, the first ever Big 5 Saudi Conference will provide a highly interactive platform for the construction leaders in the Kingdom highlighting the key challenges and the common solutions which need to be implemented. There will be a heightened focus on how to ensure sustainability and economic viability of all projects. The Big 5 Saudi aims to complement the UAE flagship event, which will return to DWTC from November 21 – 24, 2011.
Emphasising on the success of The Big 5 2010, White, says, “Initial feedback from both visitors and exhibitors is that this year has been a great success. We have seen a number of new technologies, from both regional and international companies, launched here.”
Exhibitors and visitors have expressed an optimistic outlook for the industry, and a number of signed contracts, formed relationships and extensive networking has taken place. Pratap Vijay Padode, Editor-in-Chief, Construction World, interacts with some of the top-notch international representatives to know more about their investment and trade activities with the UAE.
“We plan to enhance the effectiveness of our department.”
Dato’ Dzulkifli, Sr Trade Commissioner, Counsellor (Trade), talks about the projects executed by Malaysian companies in the UAE, introduction of green technology and their participation in the Big 5 Show.
Like other countries, Malaysia has also observed a decline in trade with the UAE. Your comments.In 2010, our trade with the UAE increased by 20 per cent, as compared to 2009. Also, post August 2010, our exports increased by 19.4 per cent to 2009, where we experienced a 22 per cent drop in exports.
How do you plan to increase your trade activities with the UAE in the near future?Apart from our own Mauritius Service Exhibition, we participate in about seven big exhibitions in Dubai including the Big 5 Show every year. In the future, we plan to participate in more exhibitions, not just restricting ourselves to the UAE, but other regions like Iran and Iraq.
The Malaysian strategy is to diversify our exports as well as our markets. At present, we are bringing in more products particularly with the green technology to cater to the market demand. We also plan to bring in the Malaysian indigenous technology, which will add to our expertise. We have our clients in UAE who are responsible for the development and infrastructure. At present, we have companies executing projects in the Yas Island. The Formula 1 track is constructed by a Malaysian company. Also, in Dubai, we have Malaysian architects completing the Meydan racecourse. Along with these, we are definitely looking forward for more projects in the near future.
There has been an issue of slow payment from the government. How have you tackled that?The most important thing for companies is to avoid getting delayed or slow payments. But we are confident that the UAE Government will continue to develop the country and equally invest in infrastructure as well as housing.
We take this as a challenge and move forward with our green business in this region. Moreover, the problem of slow payment is faced by all companies; and it’s not only the government, but private business entities too delay payments.
Apart from green technology which other segments are you looking at?We plan to use the solar system to generate energy. In Malaysia, there is a company that segregates household or municipality waste and converts it into energy. This not just helps clean the environment, but reduces CO2 and carbon footprint. Another company produces coating materials based on water soluble properties. We also have a Malaysian engineering company as well as an architect who has the ability to design as per the current requirements of green technology.
In July 2009, a delay in payment of all government related entities (GREs) was announced in the UAE. However, to what I see now, the market is certainly improving. Trading activities are not really affected except those related to the real estate. UAE, in general, is considered as the hub for the steel business. Also the banking sector has not really been affected. So these are good signs which indicate that the country can turn around very fast.
Are you looking at investments from UAE into Malaysia, or the other way round?At present, we are looking at two activities. One is to have a foreign direct investment (FDI) from UAE to Malaysia. And secondly, we are also looking for Malaysian companies to be present in the UAE either in manufacturing or trading. While the Mubadala Group has proposed to invest in Malaysia, many Malaysian companies are setting base in Dubai.
We believe that the entire sector has not been affected and business opportunities are still high. The Big 5 Show is one of the opening platforms for us and we have been a part of it for the last eight to nine years. In 2010, we had around 51 Malaysian companies participating in Big 5 the biggest building material exhibition in the region.
“Such a show will have a major impact in India.”
Hans-Joerg Hoertnagl, Commercial Counsellor, Austrian Trade Commission talks about the Indian building industry, and the impact a show like The Big 5 would have in India.
How do you view the Indian building Industry?The consciousness level in India at the moment is very low. But nevertheless, there are some interesting developments. With these projects, there are some big companies making an attempt to bring about a change. This involves a lot of effort and the appropriate marketing strategies.
In your opinion, what response will a show like the Big5 receive, if organised in India?This show will prove highly benefecial to both Indian and International business as it will not only expose them to the latest trends available in the global market, but also provide them with a platform to showcase their own products.
“In the UAE, loads of projects are coming up in Ras Al Khaimah.”
Mansyur Pangeran, Consul General, Indonesia, talks about the relationship between the UAE and Indonesia in terms of investment and trade.
Elaborate on your business in the UAE.We first started operations in Dubai and steadily expanded to six out of the seven emirates in the UAE. The Indonesian economy has improved significantly. Also, we are trying our best to meet global standards. So having our business spread in the UAE is a feasible option.
UAE currently is a trading partner with Indonesia. Are you looking for investments from UAE to Indonesia and the other way round too?There are two kinds of major issues, one is trading and the other is investment. We are trying to increase the potential in all regions. For example, in Indonesia we had an International Trade Expo from October 13-17, where we brought together 57 prominent Emirat businessmen. We then organised a seminar with the regional government, chamber of commerce, and investment bureau in Indonesia. We realised that Dubai is a hub for business. While they import from other countries, there is an equal involvement in export activities to other countries as well as the central Asian countries. As a part of their expansion plans, they want to engage in the coal mining business.
There are a few businessmen and companies who are planning to invest here. At present there is a company trying to invest in energy and power for our engineering project in South Sumatra. So we are trying to arrange a meeting between the company and the authority concerned in Indonesia. Another company, Tani Investments, is planning to invest to explore gold in West Java. In Indonesia, we have a strong potential in minerals. This not just involves gold, but diamonds, coal, aluminium, iron, etc. Indonesia is one of the biggest countries producing coal all over the world. We rank number two after China.
Also, loads of projects are coming up in Ras Al Khaimah. There are about three to four projects in the area of smelting aluminium. Then there are rail projects spread over 280 km and, projects in coal mining as well. Companies like Fior Investment is actively involved in investing for projects in the UAE.
The Indonesian Government is becoming more pro investment. Your comments.For two decades now, the government has been making an attempt to get businessmen to invest in Indonesia in the various sectors. We have plenty of raw material, and this is what makes Indonesia one of the industrialist countries. Indonesia holds the capacity to produce around 900-1,000 barrels of oil and gas, but almost 80 per cent of Indonesia is yet to be explored.
At present, we have two projects for exploring oil with a total investment of more than 1 billion. Indonesia holds a strong potential in the geo-thermal sector in the world of which only 6 per cent has been explored. For this, the Indonesian Government is dealing with countries like Iceland that has the required technology and capital.
“In terms of larger projects, Abu Dhabi is growing.”
Dr Peter Gopfrich, CEO, German Emirati Joint Council for Industry & Commerce (AHK), talks about the factors that compel German companies to settle in Dubai and how they operate.
All along, Germany has had a strong presence in the Big 5 Show. In your opinion, has the country successfully utilised the platform that UAE provides for the construction business? The construction business in UAE can be viewed in two directions. Since last year, a decrease in the construction business has been witnessed in Dubai. Also, a number of projects have been put on hold, which in turn has affected the German activities. However, these German companies have not faced major losses because though located in Dubai, they operate in Abu Dhabi. This has been a clear trend. It would be wrong to say that Abu Dhabi compensates for the losses in Dubai, but it definitely helps increase activity.
At present, we are in an intertwined situation; as the German companies present in the Big 5 Show also aim at establishing their presence in countries like Saudi Arabia and Qatar. Despite crises, Dubai as a regional hub offers many other incentives. I believe this is what compels German companies to settle in Dubai, while they continue their major businesses in Abu Dhabi.
From 2009 to 2010, have you seen an uptick in the actual flow of business?Talking about the business movement here, though there are no major projects, there is some scope for growth through the ongoing projects. Also big business in the field of eco-friendly, energy efficient, green technology and green buildings is being witnessed here. In terms of larger projects, I see Abu Dhabi growing, if not Qatar or Saudi Arabia.
What do you suggest as the way forward for Dubai to regain its pre-eminent position? Efforts to regain Dubai’s pre-eminent position are already in the process. Also, the investment chamber may get more attractive in order to keep Dubai positioned as a regional service centre, logistic centre, etc.
Despite having our offices in Qatar, Oman and so on, I believe that Dubai has an excellent infrastructure which was built even before the crises. And today, countries like Qatar which have more money for the time being are yet lagging behind. It is a misconception that Abi Dhabi, which financially has an upper hand and a number of ongoing projects, can surpass Dubai. However, if the two countries had to be compared some years ago from now, in terms of infrastructure, they would be more or less on par with each other.
“The Big 5 Show 2010 has lived up to our expectations.”
Dr Wolfgang Penzias, Trade Commissioner, Austrian Embassy, talks about the prevailing scenario and the ownership model and, the reasons for it being adopted in the UAE market.
Tell us about your experience at the Big 5 2010.Despite turbulent market conditions, we were extremely optimistic about Big 5 2010 and it has lived up to our expectations.
What would you like to say about the prevailing scenario?There are still some difficulties prevailing in particular markets or segments of the construction industry. But, looking at the bigger picture, I think there is a new kind of optimism in certain markets, which was fairly distinct even at the Big 5 2010. Dubai, a known landmark for all the other construction markets, is witnessing a number of construction activities. Today, the people looking at the construction market are more the owners and the occupiers of the land or the property rather than just an investors who make an investment and then sell it. So that is a very important driver for our optimism because if there is an owner driven construction market, it will feed into more of sustainable construction.
No doubt, there are some excellent companies from the east of Asia who can compete with us. But there is also an element which somebody looks at as a lifecycle cost rather than the simple construction process. For instance, for a rail road system to work, the initial investment is one third and the cost to maintain it is two third of the process. Hence looking at the lifecycle cost is much more important especially in long term capital goods like a house or a building.
Also, we had a severe downturn in 2009 and the GCC exports went down to 25 per cent. However, in 2010 we were up again, and the scenario seems improved.
What is your opinion on the ownership model coming in? Why is this new revised model being adopted?I think here we are looking at three segments of the market. One is the pure speculator who has no interest and just wants to make money and leave. Second is the government sector which has its indigenous programme of building infrastructure and third is the private sector. Of these, the government has certainly taken over. The UAE and Qatar for instance, are the markets which we can observe. So while the private sector is still hesitant, the government sector is definitely going ahead and looking at quality and lifestyle. And this is where optimism comes from.
What we have done in the past and what we continue to do always is to meet the suppliers in the industry. As one of our local traders informed, during recession people who were building their own homes were trying to purchase products that met their needs. But with such inflated prices, within one to two years, they were not able to sell off those investments. They realised that the returns was same as the amount invested. Hence, now the mindset has come to a point where they would not mind paying extra for a product that would have a longer shelf-life. So that was how quality became an important factor.
Have the prices become more realistic as a result of this? There are two effects to this. One is that ours is a euro based economy. In 2009, the value of 1 € was US$165. It was then that the European products were difficult to sell. But now we are at $130, which is 20 per cent less. This is mostly applicable for the construction and engineering goods. Secondly, the companies had to develop a business model that would have value engineering. You look through all the processes in your company and devise means to save money. Here, we talk of the whole supply chain, in terms of where can we outsource.
So, these effects have made the Austrian companies more competitive today. Its a two-way process, where not only the market struggles to appreciate our products or our lifecycle cost, but also on the producers’ side, cut that cost and look into the euro dollar exchange.