BDP group finance director on how the practice navigated it’s way to success in the Middle East
In 2009, the UK economy looked bleak and our workload had dipped. But the Middle Eastern market remained buoyant, and we made a strategic decision to open a new studio.
This began by acquiring a small firm of architects which facilitated obtaining the necessary permits initially required, together with a local presence, registration and knowledge. As well as our group expertise in various sectors, we also used knowledge of culture and business practice from a number of existing staff of Middle East origin.
Some countries are better to work in than others
Work in the region comes with additional cultural challenges, travel and time pressures, sometimes onerous contractual obligations and heavy up-front investment as a result of drawn-out payment terms. Some countries are better to work in than others – it takes time to understand the jigsaw.
Contracts often assume payment on completion of a phase, which may be out of the architect’s control, as well as performance bonds to protect a client against the architect’s failure to deliver – in addition to indemnity insurance.
On top of working capital to deliver the contract, your bank may want the business to set aside enough cash to cover the bond it issues on your behalf.
The government’s export credit agency, UK Export Finance, supported us with bond facilities which enhanced our ability to proceed with further work in the Middle East. This help, along with bank support, gave us the confidence to bid for further projects.
We have now completed a large school in Dubai, and are working on a university in Saudi Arabia, two academies in Qatar and masterplans in Kuwait. In Abu Dhabi, we have completed a major healthcare facility and last month won an international competition for a new 13,000m² cruise terminal at Zayed Port in the emirate.
- Heather Wells, group finance director, BDP