The exit of major players such as Arabtec from the GCC construction sector has impacted current projects, supply chains and banks, creating a market that is ripe for consolidation, according to the CEO of regional design-build contractor Amana Investments.
Riad Bsaibes, president and CEO of Amana, said that from being a fragmented industry with several small players, the region’s construction sector is moving towards consolidation, with larger entities that can take advantage of economies of scale.
“The pandemic delayed projects, due to various new safety measures, posing liquidity challenges to developers and contractors in a softened market, he said, adding that the industry continues to grapple with cash preservation issues across the client and supply base.
“Delays are also likely to result in increased disputes over contractual completion of projects. The exit of major players in the UAE has impacted current projects, supply chains and banks, creating a market that is ripe for consolidation.”
Bsaibes (pictured above) said the Covid-19 pandemic has accelerated disruptions in the GCC’s construction industry, creating a mix of opportunities and headwinds.
To navigate the ‘new normal’, the region’s construction ecosystem needs to make strategic business decisions, he added.
“Construction companies have to invest in digital transformation to future-proof their business and boost profitability in a dynamic market. We are also seeing a greater leaning into sustainability. One of the most significant trend stories of 2021 will be the convergence of manufacturing, technology and construction.
“We will see modular construction gaining traction, as it reduces waste, cuts projects costs and timelines, while complying with new on-site health and safety protocols,” he said.
Amana, which is launching a platform for off-site construction, said it believes that as projects race to completion amid unprecedented challenges, modular construction will emerge as a viable solution as it decreases the need for manpower by 30 percent, making it an ideal solution for the post-pandemic environment.
Amana also warned that there is a growing gap between the supply of labour and the digital skills needed. Talent acquisition and development will be significant challenges, especially in Saudi Arabia’s growing construction sector, Bsaibes said.
“Attracting the best and brightest people, retaining them and keeping them engaged and motivated, remains a significant challenge. Increasing gender diversity within the workforce, fostering an appealing organisational culture and increasing automation are key focus areas for construction leaders like Amana as it forges ahead in 2021,” he added.
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