While centralised government investment is a comforting and currently viable raft to cling onto, don’t let it distract from the broader imperative to diversify
In a buoyantly exuberant report, Ventures Onsite has reported that infrastructure spend in the GCC could hit $288bn by 2020, despite the slump in oil prices, as its governments embark on ambitious programmes of expenditure as a form of economic stimulus.
In a concrete example, the RTA also awarded the main construction contract for Dubai’s Route 2020 project, which is being built at a cost of $2.89bn, to a consortium of French, Spanish, and Turkish firms in June this year.
The willingness of authorities to continue to prioritise the development of infrastructure is no doubt welcome news for the construction industry, and we see that promise shining through in the more robust plant, machinery and vehicles segments — tower cranes for one.
Infrastructure is a sound investment where cities like Dubai are concerned, as every inch of road laid fuels the minds of entrepreneurial developers to conceptualise new plans for the area — as is already very much planned for the banks of the newly completed Dubai Water Canal.
Practically, the region has also built up a very larger circular economy around construction, and projects mean income for local majority owned contractors and equipment suppliers — and in turn, income for foreign workers, who will put money back into goods and services.
Infrastructure investment is the region playing to its existing inherent strengths, and yet by no means is this the only card the government has to play or should it be the only thing that equipment providers rely on for business.
Last month I spoke about the growing number of companies looking increasingly outside of the region for alternative avenues of business. Raimondi Cranes provided a fresh example this month as it signed a new agent in Germany, and certainly, a broad geographical spread is one strategy. In the context of Middle East markets, however, the business prospects in the wider region are a shadow of their former selves.
And yet, the same can also be achieved by broadening or strengthening presence within the GCC, and this month we have seen both Hitachi sign Middle East Crane Equipment as its exclusive distributor for the UAE and Terex similarly name Manlift as a distributor in Qatar.
Another strategy is product diversification, and in a curious coincidence, the month saw both Ram Trucks launch a new medium-range metric-tonne pick-up truck for the commercial segment and Daimler announce its parallel plans to enter the light pick-up segment.
Broadening your portfolio can also include diversifying away from your core brands, as we see in the Little Interview with John Taylor, COO of Sitech Gulf, he unveils the company’s plans to split into three separate businesses — two of which will expressly offer products not manufactured by Trimble. Indeed, Taylor actively notes that the plan is to have all Sitech sales people educated on the merits of their rival systems and even to recommend customers to their new sister companies where appropriate.
Open mindedness can be a beautiful thing, and it can also be profitable. Now it’s time to ask the audience: when did you last diversify?
Wide-angle business: On the need to diversify
While centralised government investment is a comforting and currently viable raft to cling onto, don’t let it distract from the broader imperative to diversify
In a buoyantly exuberant report, Ventures Onsite has reported that infrastructure spend in the GCC could hit $288bn by 2020, despite the slump in oil prices, as its governments embark on ambitious programmes of expenditure as a form of economic stimulus.
In a concrete example, the RTA also awarded the main construction contract for Dubai’s Route 2020 project, which is being built at a cost of $2.89bn, to a consortium of French, Spanish, and Turkish firms in June this year.
The willingness of authorities to continue to prioritise the development of infrastructure is no doubt welcome news for the construction industry, and we see that promise shining through in the more robust plant, machinery and vehicles segments — tower cranes for one.
Infrastructure is a sound investment where cities like Dubai are concerned, as every inch of road laid fuels the minds of entrepreneurial developers to conceptualise new plans for the area — as is already very much planned for the banks of the newly completed Dubai Water Canal.
Practically, the region has also built up a very larger circular economy around construction, and projects mean income for local majority owned contractors and equipment suppliers — and in turn, income for foreign workers, who will put money back into goods and services.
Infrastructure investment is the region playing to its existing inherent strengths, and yet by no means is this the only card the government has to play or should it be the only thing that equipment providers rely on for business.
Last month I spoke about the growing number of companies looking increasingly outside of the region for alternative avenues of business. Raimondi Cranes provided a fresh example this month as it signed a new agent in Germany, and certainly, a broad geographical spread is one strategy. In the context of Middle East markets, however, the business prospects in the wider region are a shadow of their former selves.
And yet, the same can also be achieved by broadening or strengthening presence within the GCC, and this month we have seen both Hitachi sign Middle East Crane Equipment as its exclusive distributor for the UAE and Terex similarly name Manlift as a distributor in Qatar.
Another strategy is product diversification, and in a curious coincidence, the month saw both Ram Trucks launch a new medium-range metric-tonne pick-up truck for the commercial segment and Daimler announce its parallel plans to enter the light pick-up segment.
Broadening your portfolio can also include diversifying away from your core brands, as we see in the Little Interview with John Taylor, COO of Sitech Gulf, he unveils the company’s plans to split into three separate businesses — two of which will expressly offer products not manufactured by Trimble. Indeed, Taylor actively notes that the plan is to have all Sitech sales people educated on the merits of their rival systems and even to recommend customers to their new sister companies where appropriate.
Open mindedness can be a beautiful thing, and it can also be profitable. Now it’s time to ask the audience: when did you last diversify?
GCC infrastructure spend could hit $288bn by 2020