News

winning challenging contracts during trying times

Dec 13, 2016

Nobody with any knowledge of the Middle East’s construction sector would claim that it is an easy region in which to work. The projects taking place in the Gulf are among the most ambitious and technically challenging anywhere in the world. With this in mind, one would not begrudge a firm for trying to make life a little easier for itself.

But ByrneLooby, an international engineering services company that originated in the Republic of Ireland, has never been one to follow the path of least resistance. On the contrary, its strategy is to seek out the most challenging contracts, safe in the knowledge that many of its rivals won’t be up to the job. In conversation with Construction Week during one of his regular visits to the UAE, the company’s managing director, Michael Looby, proudly outlines this strategy.

“All of the services that ByrneLooby offers are quite specialist,” he explains. “We’ve found that by working in the more challenging segments of engineering, we’ve been able to secure more business and command higher premiums. From a strategic perspective, whether in the fields of oil and gas, construction, or infrastructure, we prefer to concentrate on specialist areas.”

Encouragingly, this can-do attitude appears to be paying dividends, both in terms of ByrneLooby’s financial growth and its increasing market share.

“The economic climate [in the GCC] has certainly changed; that’s stating the obvious,” Looby notes. “We’re finding things relatively challenging but we’re also very busy, and I think we’ll [continue to be] very busy in 2017. ByrneLooby has achieved 15% to 20% growth for the last five years, and we’re looking to achieve the same level of growth next year. What’s more, our profit is typically between 12% and 15% [of revenue].”

Of course, it would be futile for a firm to pursue challenging engineering contracts if it was ill-equipped to meet client expectations. For this reason, Looby has taken great pains to ensure that his senior management figures in the Middle East have the breadth of skills and experience necessary to complete the region’s most complicated engineering jobs.

“In the past three years, we’ve strengthened our management team significantly,” he explains. “We’ve hired 10 associate- to director-level people, the majority of whom have 15-plus years of experience in the Middle East. They have strong local relationships and solid understanding of project delivery.”

Today, the group employs approximately 150 engineering specialists across its four GCC offices, which are located in Bahrain, Qatar, Saudi Arabia, and the UAE. It also employs in excess of 200 field staff to support its operations at any one time – a number that fluctuates in line with its project portfolio. A combination of globally applicable skills and local experience has proved vital in enabling Looby’s GCC team to continue to grow.

“We like to have a mixture of cultures; this definitely improves [our capabilities], and gives us far more insight into [the most effective strategies] in different countries,” says Looby. “What we’ve tried to achieve is an international capability with strong local teams on the ground. We have worked to strike the right balance between what’s good about our global practice, and what makes for a robust in-country presence.

“To this end, one of the things we’ve learnt since entering the GCC is that each of the local markets is different. The UAE is very different from Qatar, which is very different from Saudi Arabia, and so on. There are nuances and subtleties in each market, and it’s important to understand [what they are].”

Perhaps owing to this appreciation of country-specific subtleties, ByrneLooby’s GCC workforce has succeeded in securing contracts on some of the region’s most high-profile projects.

The company is conducting utility design, 3D modelling, and the design of heavy civils for FAST Consortium on Saudi Arabia’s Riyadh Metro, and for Doha Metro’s Green Line in Qatar. Also in Qatar, it has completed its contract with Hyundai on the Lusail Expressway, has ongoing work on the Inner Doha Re-sewerage Implementation Strategy (IDRIS), and is conducting utilities design for Al Wakrah Logistics City.

In Saudi Arabia, ByrneLooby is carrying out a number of environmental projects on behalf of Saudi Aramco and its GES+ contractors. It is also working on several Royal Commission schemes, including a 5km coastal protection and upgrade programme in Jubail.

In Bahrain, Looby’s permanent base, his team is conducting utilities design for East Sitra Village, and is involved in large-scale private projects on behalf of Diyar Al MuharraqEdamahBahrain BayAmlak, and Manara Developments.

In the UAE, ByrneLooby is supporting projects for clients such as Marasi, Aldar, and Gemstone. The company is also working with UAE-based DP World and P&O on several marine developments in Africa.

In addition, Looby’s GCC team is expanding its business footprint in the energy sector through collaborations with Saudi Aramco Shell Refinery (SASREF), Bahrain Petroleum Company (BAPCO), and Saudi Arabia Basic Industries Corporation (SABIC).

When Looby says that his company is very busy, he is not speaking hyperbolically. Even so, he seems reluctant to take personal credit for this impressive regional portfolio. Instead, he emphasises that by establishing broad parameters and objectives for ByrneLooby’s GCC businesses, the company’s technical leaders have been given autonomy to achieve success in line with their own strengths and styles.

“With the level of growth we’re trying to achieve, it’s not possible to be a micromanager; we need our technical leaders to have full strategic and operational autonomy,” Looby explains. “Autonomy is good, but it’s vital that you deliver. So we set broad goals when it comes to working capital investment, revenue growth, and key target sectors. How our technical directors achieve these goals is up to them.

“All terms and conditions, tendering, pricing strategies, and payment [stipulations] are negotiated and agreed upon locally. We need to remain reactive. Our customers don’t want to have to wait for someone to fly in from Bahrain in three or four days’ time, so all of our GCC offices must be self-sufficient in this respect.”

Hiring the right people, and allowing them to succeed on their own terms within mutually agreed parameters, are the core principles upon which ByrneLooby’s GCC operations have been built. Nevertheless, Looby is equally comfortable pursuing growth via acquisitive means.

In 2016 alone, the consultancy has completed mergers and acquisitions (M&As) with four companies: Cronin Millar, AMT Environmental, FT Arabia, and an oil and gas maintenance company in Saudi Arabia.

In reference to the latter, Looby comments: “That [M&A] has just been closed, but we’re not yet in a position to [name the company].”

ByrneLooby’s managing director describes M&As as an effective tool for acquiring talent and achieving additional growth.

“Because even with the economy the way it is, it’s still hard to get good people,” he elaborates. “We’re quite selective in this respect; we like strong, technical people, so [M&As] are a nice way of acquiring talent, capabilities, history, and revenue.

“Next year, we’re likely to continue along this path. I expect that we’ll try to acquire one or two companies in the UK, and we’ll continue to consider [M&As] as a strategic growth initiative.”

Despite his firm’s M&A-related successes, Looby points out that such deals only achieve the desired results when they are identified and conducted in an appropriate manner.

“The thing about buying companies is that, if you have a willing partner and a willing seller, it becomes a lot easier,” he notes. “The key is to identify companies that are ready for sale, or that can be easily convinced that they are ready. It may be the case that they’ve reached a maturity date whereby the owners want to retire. It may be that the market is hard, and [they] want [an exit route].

“ByrneLooby uses a number of selection processes to identify companies that are ripe for acquisition. We engage with key management consultants that are aware of clients that might be receptive to [M&As]. It is also important to identify companies that are culturally aligned with ByrneLooby. The people within the prospect organisations and their service offerings must complement us. In turn, we must complement them.”

Whether one is referring to talent, clients, or prospective M&As, Looby says that this complementary nature always comes down to the same consideration: high performance.

“When I describe ByrneLooby as a high-performance business, I mean it is a company that delivers on time, motivates and empowers its staff, innovates, and makes money,” he explains. “There’s a subtlety in the market today; when a client chooses to spend money in the Middle East, it is looking for genuine value. It’s therefore important for us to ensure that we are delivering that value, and high performance is key. It’s about how we can achieve something a little bit different, and give a little bit more to the client.

“This high-performance mentality also contributes to repeat business. I’ve no doubt that it’s the most powerful form of marketing that we have. It leads to huge client retention, a significant number of new clients, and it also delivers a premium in terms of profit.”

Looby is clearly optimistic about the direction in which his company is heading, but what trends does he foresee in the broader industry during the course of next year?

“My view is that the GCC market will stay as it is for another 18 months,” he responds. “That could easily be 24 months; I expect to see [improvement] in the next 18 to 24 months. But notwithstanding that, [there are opportunities related to] the marine, utilities, oil and gas brownfield engineering, and environmental management segments. These are growing priorities in the [GCC].”

Looby concludes: “[Even in today’s market,] there are opportunities if you look in the right places. Now, I’m not saying it’s easy, but they do exist. It’s about having the people who can win this work and deliver.”

ONWARDS AND OUTWARDS

Since entering the GCC region in 2009, ByrneLooby has established offices in Bahrain, Qatar, Saudi Arabia, and the UAE. It is now looking to expand its regional footprint.

Michael Looby explains: “In addition to our existing GCC offices, we have established an office in Basra, Iraq, where we are extending our footprint with Exxon and other independent oil companies. We are also looking at Iran.”

Looby intends to offer the full suite of ByrneLooby’s expertise in these markets. “We have two companies: ByrneLooby and BL Energy.” He says. “ByrneLooby is a specialist engineering form that covers marine, environmental, tunnelling, water, geotechnical, utilities, and heavy civils – both for clients and as contractors’ designers.

“BL Energy, a sister company of ByrneLooby, is an integrated energy services firm that focusses on brownfield engineering, modifications, and shutdowns within the oil and gas sector. This could involve engineering, procurement, construction management, systems completions, commissioning, and technical support services for modifications and upgrades (of existing facilities)”.

Encouragingly, Looby’s team is also pursuing geographical expansion in other regions. He continues: “For us, the next three years will be about developing these offices. BL energy has just established an office in Thailand, which we’re going to use (as a base) for the Asia Pacific region. The energy and water infrastructure sectors are very interesting in this region; they’re the areas on which we’ll be concentrating, and I think we’ll be very busy.

“As for BL Energy, in two to three years, we also plan to look at (expansion into) other global markets, including South America,” Looby adds, while emphasising that these plans are at an incubatory stage.