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Laing O’Rourke to rebuild UAE presence

The UK contractor Laing O’Rourke is rebuilding its operations in the UAE following a dramatic downsizing after the 2008 financial crisis.

The company’s Middle East managing director, Mark Andrews, said that the company was on track to “more than double turnover we did in the last financial year for the Middle East” as a result of a number of new contracts, including one at Dubai Parks and Resorts to deliver the Motiongate theme park alongside Al Futtaim Carillion.

Mr Andrews said that the work won will help to take the business to “the sort of size where we can look at larger projects than we clearly have been able to in the past couple of years”.

Laing O’Rourke was a major player in the Middle East before the 2008 downturn, with a total workforce of about 20,000, including several thousand professional staff. Many of these had worked for a joint venture with Aldar, which had built Al Raha Beach area and surrounding buildings such as Al Bandar, Al Zeina and Aldar’s own HQ. In Dubai, the company built the Atlantis Hotel and the Mall of the Emirates ski slope.

However, after the Aldar partnership came to an end and work dried up elsewhere, the company’s workforce fell back to a core of about 3,000.

The decision to appoint Mr Andrews – a former chief operating officer at Arabtec and ex-managing director at Murray & Roberts and Drake & Scull International – was part of a “rethink” last year by the privately-owned company, whose most recently-filed financial accounts for the year ending 31 March 2014 show a net profit of £49.1 million (Dh277.5m) on revenue of £3.6 billion.

“I certainly joined on the basis that we come in, have a fresh look and see if we can grow the business back, not necessarily to the scale that it was in the Aldar days, but to where it has a critical mass and we can go after larger projects.”

For instance, its reduced scale meant the company did not feel it could tender for the new Royal Atlantis project next to the hotel it built at Palm Jumeirah.

“The trick for us now is to get ourselves in a better position to be able to perform, to provide value and to make a bit of money in the process.”

Mr Andrews said it the company was not interested in large-scale civil infrastructure projects such as roads and bridges, but will instead seek more complex building projects, including airports and healthcare work.

He also said that it would like to introduce more modular building techniques into Middle East projects.

Laing O’Rourke is already building a Hilton Garden Inn hotel near Mall of the Emirates using bathroom “pods” with all of the showers, tiling and furniture pre-built at a factory in Jebel Ali and then dropped into place on site.

Mr Andrews said modular construction had developed in the UK by a desire to reduce labour costs, but in the UAE “quality and certainty of delivery” were greater drivers.

“There’s an awful lot of things in bathroom units that can cause maintenance problems down the road if they are not done properly. Building them in a factory gives a much greater consistency.”

A report published by Ventures Onsite for The Big 5 construction trade show in Dubai predicted that contract awards in the UAE’s construction sector were likely to grow by 4 per cent this year to $45.8bn – up from $43.9bn last year.

“Construction is likely to register strong growth due to the expanding retail sector, continued development of tourism and hospitality sectors, upgrades to airports, transport and logistics frameworks,” it said.

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