multiforms - Construction Week Interview

“We now see more competition from the larger companies venturing into the middle range of projects valued at $60m to $100m. The market has flattened and contracts are being chased by all major players.”

The situation is exacerbated by the presence of a range of players in the market, which has increased the level of competition, which has contributed to a major decline in prices.

Neil Anthony Doe, Formawall product manager at Rigidal, says: “The local market is best described as fiercely competitive.” Haslam urges companies to consider quality when choosing contractors. Companies do need to factor in build quality, and not just to look for the cheapest option.

“They must also look at the past history of companies and their ability to actually deliver great results, as opposed to failing to deliver, or sub-standard delivery. It is possible to have a quality product at a reasonable price, within budget and within international standards,” says Haslam.

The alternative to this is a market where profit margins and bottom lines are eroded for all players concerned, warns Haslam. “In Dubai, the main driver is cost. Presently we are seeing in excess of 15 main contractors bidding for the same work, with each one bringing at least three suppliers. This, as you will imagine, is driving cost down locally to a point that is simply not sustainable.”

Doe says cost is the major driver. “In Dubai, things are tight, and without question cost is the single biggest driver. Further afield the picture is different; this largely explains why our 30% export and 70% domestic sales is now reversed.”

The biggest challenge for the cladding sector, as Doe points out, is convincing companies that these prices are unsustainable. “The market needs to take time to breathe and recover.

To be fair, if I were a client in Dubai, now is probably the best time to build. That said, as a supplier, this mentality – at a time when costs are on the rise – leaves you little room to manoeuvre, and if sustained becomes uncomfortable.

“This happens in the steel sector occasionally, and those guys simply shut a mill or two to reduce capacity in the market and stabilise prices. We sadly do not have that luxury, and we all have overheads to cover,” says Doe.

Despite such intense competition, however, business is still viable as the number of projects in the GCC is on the increase, and therefore the demand for cladding is still very much present.

Multiform is currently mobilising for such major projects such as Muscat Airport in Oman and SABIC (Saudi Basic Industries Corporation) in Saudi Arabia.

“We are currently also developing and expanding our business into Qatar, Bahrain, Lebanon and Kuwait, among other territories,” adds Haslam.

Back in Dubai, the company is also involved in a variety of projects. “We carried out all the façade works for the latest icon by Foster + Partners, the Index Tower in DIFC in Dubai, which is due to open soon.

The Index Tower is orientated in such a way that the eastern and western concrete cores shelter the floors from the harsh desert sun and the general climatic effects of the area.

"The south-facing façade that Multiforms produced and installed utilises extensive sun shades to lower solar gain,” explains Haslam. Another Multiform project nearing completion is Emaar Boulevard Plaza.

The two towers arch convexly as they rise, and are formed using a combination of glass, metal and stone skin. The towers form two deep-shadowed arches offering sweeping views of Downtown Dubai.

Rigidal has obtained most of its business from the airport sector, which is currently booming in the region, with one of the latest developments being the ongoing expansion of Dubai International Airport.

Doe points out that Rigidal has been in the region for over 30 years. “We have worked extensively on many of the region’s airport schemes, having almost exclusively delivered all of the roofing and cladding at the New Doha International Airport.”

Now that business is starting to pick up again, how did companies survive the dry spell? Cladding companies used an international approach to minimise the effect of the slowdown in business.

Having clients all over the world means Multiform, for example, did not focus on one area, but had an international client base, meaning there was always business no matter how minimal.

“Although we are a UAE-based company, we took the early initiative to partner with ACWA Holdings in Saudi Arabia to focus on an area of exceptional growth.

"We also had been working on projects outside of the UAE throughout our history here, such as Castle House in the UK. So when the downturn did hit the UAE, we already had the business, reputation and expertise in place to minimise its effect on us.

"Our strategy has always been that Multiform is a local company with a very international outlook, which has really helped us through these tough times,” says Haslam.

However, post-slowdown, the Qatari and Saudi markets have opened up great opportunities for the cladding sector. Cladding companies are delighted at the growth in the region, which means business is still up and running after a relatively dry spell.

“We are looking forward to growth in the region. It is very important to the industry as a whole, for its growth and recovery, but it also very important for Multiform as a company,” says Haslam.

Doe says that “both Saudi Arabia and Qatar will be huge over the next five years. I was with consultants in Qatar recently, which said they simply will not have the staffing levels to meet demand. Saudi is a similar picture; one thing that is noticeable in this part of the world is the sheer scale."

It is the magnitude of the projects which makes the region such an exciting place for the industry. “Much of Europe has built its infrastructure over thousands of years. The Middle East seems intent on reaching the same level of advancement in under a decade,” says Doe.

India is next as a major growth market. “In terms of the next ‘big bang’ for us, the signs are that India will be our next biggest growth market.” When it comes to cladding, there is without a doubt a shift in perception, and more of a focus on quality.

“Clients are starting to see the long-term value of well-engineered solutions, instead of simply looking at the entry cost,” says Doe. “Projects being specified are again starting to see value built in rather than cost driven down, but this will take time to hit the market.”

However, Haslam disagrees, and sees cost as the primary issue in the region that continues to override quality. “Quality can become an issue, and is something that is often forgotten when the overriding issue is to push price down."

Price being the main factor still means sustainability is also being compromised; Doe believes there is still not enough being done, or invested, when it comes to sustainability in the cladding sector.

“Sadly very little is being done. As of yet, sustainability has a price, and there are few that are willing to pay that price,” says Doe. Although the company has invested in this regard, it is yet to see returns.

“Building standards and codes are great for people who take the business seriously. We have invested quite literally millions over the years in an effort to stay at the forefront of technology; this extends to green issues, and we would love to see changes in legislation that help us to recover some of that investment.”

Doe is still hopeful, however. “I am sure it will come in time, but until such time as cost stops being the main driver, I do not think it will gain much ground.

“In reality, the building envelope is key to the energy performance of a building, and yet we still see fundamentally flawed systems chosen over the right solution due to price. It is frustrating, to say the least.”

Consultants should truly open the door when it comes to sustainability, giving it a chance and not seeing it as merely a means to spend more, as it is an investment worth making.

“It astounds me how many specifications that come from fairly well-respected consultants simply do not understand what we do, or how building envelopes work. If there is an increased awareness in how cladding impacts on ‘green’ buildings, we have not seen much of it,” concludes Doe.

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