Why Qatar might be the destination of choice for global contractors
Some construction companies in Qatar include major international contractors, who are finding the amount of available work is increasing. However there are greater demands from their clients as well as increased competition. In terms of work conducted outside of their home countries, the top 250 global contractors had $543.97 billion in contracting revenue in 2013, a 6.4% increase from $511.05 billion in 2012. The top 250, as a whole, also had $871.50 billion from domestic projects in 2013, up 7.1% from $813.55 billion in 2012. Significantly, 56% of the top 250’s total domestic contracting revenue came from Chinese contractors, a result of China’s massive infrastructure and rail programmes.
Presently Qatar has underway it’s own extensive infrastructure programme, with mega-projects buoyed by unprecedented government spending, with Qatar construction companies doing very well. Yet amidst the unrest in the Middle East the IMF has just lowered its economic forecasts for most Arab countries, but raised its estimates for Qatar with continued strong growth predicted. However, whilst grand scale infrastructure projects in Qatar grab the headlines, there are many opportunities for international contractors in the lucrative subcontractor market. This Qatar Construction Review Special Report considers why Qatar might be the destination of choice for international construction companies. We also interview Amanda Reekie from Stratton & Reekie – specialist PR and marketing firm, with some valuable insights for international contractors wishing to run successful overseas marketing campaigns amidst increased competition.
Consultancy firm EC Harris recently produced their Global Infrastructure Investment Index. This report evaluates and ranks 40 countries in relation to their appeal as infrastructure investment locations, and can be used to assess the possible opportunities and risks linked with each country. The following main criteria is used to rank countries by the index:
- Quality of existing infrastructure
- Economic environment
- Ease of doing business
- Political/social environment
- Availability of finance/financial environment
Qatar is ranked second only to Singapore in this index, with the main reason for this being its strong long-term growth prospects – which resonates with the IMF’s assessment of continued growth. The country plans to spend US$100 billion alone for its infrastructure programme for completion by 2022. However, the majority of planned projects fall under the government’s 2030 National Vision. Clearly, this is a very important moment in time for Qatar if its objectives are to be fully realised. Indeed the country’s Minister of Finance Mr E Ali Sherif Al Emadi stated at the start of the year that Qatar would spend almost $182bn on public projects over the next five years (which excludes oil and gas developments and private sector investments).
In March Qatar announced it’s largest budget in the country’s history, with several billions of dollars set aside for infrastructure projects and World Cup 2022 preparations. However, just this week it has been reported that the deals awarded up to September 2014 – $22.5 billion, exceed that for the whole year of 2013. This means that with projects to be awarded in the final quarter of the year, the total spending could reach $30 billion for the very first time. In fact, we might actually see year on year record spending before Qatar realises its ambitious plans, which will mean more work for construction companies in Qatar.
With all the debate flaring up once more about Qatar being awarded the FIFA 2022 World Cup, it has to be said that even the worst-case scenario will not stop the overwhelming number of projects from being developed. The majority of projects were planned prior to Qatar being awarded the tournament. What is important is the level of GDP set aside for the government’s plans and how stable this will be in the long term. In our view Qatar’s financial clout and the stability of the government, should make the country one of the destinations of choice for international construction companies in Qatar looking for work.
It is true that the Qatari government prefers to award the majority of contracts to joint partnerships between local and international companies. However, Qatar requires the international expertise of contractors from all over the world and overseas companies are very much welcomed. The market for construction here will remain strong now and into the foreseeable future.
The same cannot be said for other parts of the world, including here in the UK. The International Monetary Fund warns the Eurozone faces a full-blown recession and the Chancellor Mr Osborne admitted that the British economy is feeling the impact of the crisis. Today there are reports that the UK construction slump is worse than any economist imagined and that professional forecasters were caught off guard by a 3.9pc monthly drop in the value of construction output this August. This is of note because it was only a few months ago that the British construction industry was seen as being in a very healthy position with increased activity. The figures for September though are predicted to improve once more.
The Middle East is not without its problems, however Qatar is set apart from all of this as previously highlighted – and indeed the financial troubles in other parts of the world. However, competition will be strong between international contractors looking for work and there are some things that must be done right from the start. For those that can deliver the incentives can of course be very lucrative. With this in mind, Qatar Construction Review interviewed a marketing expert with some good advice as to how companies can intelligently approach their entry into a new market like Qatar.
Marketing Master class with Amanda Reekie from Stratton & Reekie
QCR: Stratton & Reekie are a specialist PR and marketing consultancy – for those that do not know, can you please tell us a little about your company and the areas you specialise in?
AR: Stratton & Reekie specialises in public relations and marketing for companies and consultants working in design, property and the built environment. This has been our area of expertise for nearly thirty years. Working from our office in central London we shape our clients’ brands and promote their people, their companies and their work to local, national and international audiences. We are by choice a small experienced team. We understand the sectors in which we operate, and our clients’ business models and objectives. Working across borders requires strong people skills and acute sensitivity to cultural differences. We actively seek collaborations with professionals with complementary skills so that we can provide experts in every related field or discipline from public affairs and business management to speaker training, translations and website design. We also offer in-house experts that have worked overseas, particularly in the Middle East and in China.
QCR: Your Company has extensive Middle East experience. For international contractors seeking work in Qatar, what would you say were the top 3 most important things to get right from the beginning in terms of PR & Marketing?
- a) Research! Be clear about what it is you have to offer and how this relates to the needs of the local market.
- b) Relationship building and developing an understanding of the local marketplace, together with empathy for the local etiquette and business culture, is fundamental to success. In the Middle East business is built on mutual friendship and trust, and the best way to communicate is face to face.
- c) Build a network of key contacts who will introduce, recommend, advise and support you. These contacts might be international consultants working in Qatar or local companies. Don’t underestimate the value of local partnerships, whether formal or informal.
QCR: In the instances where a firm of architects or engineers for example, need to raise their profile overseas, what sort of things should they avoid?
AR: Complacency. You should not assume that because you are a well-known name in your home market you will receive the same respect overseas without having to work for it.
Short-sightedness. Avoid sending messages that are culturally inappropriate or that do not reflect the needs or interest of the target market.
Impatience. It takes time, consistency and determination to build a reputation.
QCR: Many international contractors thinking of working in Qatar initially visit the Project Qatar exhibition. Does gaining an overview of the buyer and seller market like this fall under a PR & marketing strategy? And if so, what sort of things should they be doing before, after and during the exhibition?
AR: Yes, very much so. One of the first things that we recommend to consultants seeking work overseas is to visit local trade shows and get a feel for the marketplace.
- Contacts make a big difference to the success of a visit. Look at the delegate list and contact everyone you know. Ask for their advice – people will appreciate being asked – and arrange to meet up.
- Spend time researching the delegates that you want to reach, and have something of interest to bring to them – not just the service you offer but an opportunity of some sort.
- Ensure that your marketing literature is culturally and market-place appropriate, i.e. that it presents the messages in the right way for the locality and reflects what the market wants to hear. Make sure any hand-outs can be tucked into a top pocket.
- Seek a position as a speaker at the exhibition but if this is not possible attend lectures and speak from the audience.
- Attend all the networking events on offer, ideally accompanied by someone who knows the local region.
- Line up a future event of some kind to which you can invite delegates that you meet. It neatly solves the follow-up problem.
- Add all the business cards into your database and find opportunities to keep in touch.
- Be humble and open-minded as well as confident and professional. You have a lot to learn.
QCR: Your solutions are tailor-made for clients; how do you assess a client’s need in a market that might be overseas for both of you?
AR: The first step would be to find out what the market itself requires in order to define how best to present our clients services. This can be achieved by reference to trade magazines, trade associations, market reports or paid-for market intelligence which can be tailored to suit a client’s particular requirements.
We would also encourage our clients to draw upon the experience of their contacts in allied professions who are already working in that country.
QCR: How important are the connections a PR & marketing firm might have for its clients?
AR: As a PR consultancy with considerable experience in this sector, we would start by drawing upon our own extensive network of contacts including media partners, event organisers, and professional bodies such as the RIBA, all of whom have their own network upon which we can build. Everyone is looking to make connections so it is a case of knowing how to leverage existing contacts to take you to the next level. This is our skill.
For further information you can contact Nissrin Zaptia at Stratton & Reekie.
For more information on Project Qatar, please click the following links: