Building opportunities in Abu DhabiSeptember 21, 2020
Anas Al Juaidi, general manager of MMEC Mannesmann - Middle East, talks to The Energy Year about the company’s approach to winning contracts in the UAE market. MMEC Mannesmann is a general EPC contractor and technology integrator/provider for projects in the oil and gas, refining and chemicals industries with a focus on onshore up- to midstream, refining and petrochemicals plants.
To what extent did establishing your regional office in 2018 help you be better prepared to face the current crisis and ensure business continuity?
We opened our office in Abu Dhabi to handle our work locally, and that has been a main factor in our success. You have to be in the region, not working through agents, in order to look after your business and properly benefit from it.
After two years of operating with ADNOC, we understand ADNOC’s strategy more than before and we are now starting to work in niche areas for them. Previously, ADNOC had their own ideas and their own plan and they generally wouldn’t accept outside information or suggestions. Today, their doors are open and you can reach them any time to suggest ideas.
That’s what we did and I have a great example of this. The Hail and Ghasha sour gas project is one of the biggest projects in the UAE, requiring more than 18 production lines from offshore to a gas plant and an onshore sulphur pipeline.
We are one of the licensors for sulphur handling technology here. It is a very sensitive product. We told ADNOC they couldn’t send this inquiry to every pipeline contractor in the market as a sulphur pipeline is not like any other pipeline – it is a cold pipeline but you need to heat it to allow the sulphur to liquefy and flow. This technology is challenging because you need to do a shutdown wherein the pipeline is cold and sulphur becomes stuck in the pipe.
On several recent projects in the UAE, the technology was not that good, and two projects were damaged by the poor experience of the contractors. But for this project ADNOC will not tender with only a pipeline category, but specifically a sulphur pipeline category. So if you are qualified only for pipelines, it doesn’t mean you are qualified for the sulphur pipeline projects.
Through this discussion, we built for ourselves a new opportunity as a contractor with experience in sulphur pipelines, as well as specific experience here in the UAE. If you stay in your office and don’t go to ADNOC to explain to them what is to their advantage, you will not get the benefits from it. You need to build the opportunity for yourself. You need to explain to your client what your experience is and what can make them more successful in their projects.
How have you managed to increase your productivity and optimise costs in the current environment?
We are working every day on this. Our advantage is that from the beginning, when we started in 2018, that was one of our top-priority subjects. We didn’t need to start in the same way that other companies that started before us did. We started in 2018 with a very clear picture of how the market is evolving.
The big companies that were established before us have an accounts department separated from a finance department and everything is handled in-house. So they have very high operational costs. We started with the idea of outsourcing those types of operational costs. You don’t need to hire all of those people in order to have payroll reports. You can outsource to a company who can do that for you and at the end of the day, if something happens, you can terminate the collaboration with them. If you have staff, you need to start calculating the end of service, handle their visas and so on.
Also, we tried from day one to ensure that roles in the company are very specific. We have only four people in our business development department. Everyone has a specific job to work on. Other companies have many people in this department and work for 100 bids to get two jobs. Our strategy is to select 100 bids or opportunities and do analysis for those opportunities to get down to 10 or 15 to discuss bidding on, and then we target three or four of these.
We do very good analysis in order to select our opportunities and to bid for them. Up until today, we have bid for only three projects. The first one we won, the second one is on hold and the third one I am awaiting an award letter for after a verbal confirmation from ADNOC.
This approach will save a lot of time and costs. If you have the right resources in your business development department, you will be able to choose suitable opportunities for your company and your capabilities. Limited resources with very organised work will end up having minor operational costs but huge results.
Looking at opportunities in the UAE’s downstream, renewables and gas self-sufficiency developments, what do these projects represent to you and how optimistic are you going forward?
I am very optimistic about the UAE’s leadership and how they plan. The UAE’s leadership has a very wide perspective on the market and chooses the right time to announce big opportunities. Don’t forget that 85% of the contractors and technology providers in the UAE are international companies. If they start to see the market going down and a lack of opportunities, in one month you will see a lot of them mobilising their teams and going back to their countries.
However, in such times the announcement of a huge project like the USD 20-billion pipeline integration will have the opposite effect: Contractors will leave other countries and come to the UAE. So they are very smart to choose this time to announce these projects.
Do you see partnerships as a viable way forward in this market?
The UAE market, with [ADNOC Group CEO] Dr. Sultan Al Jaber’s vision and mission, will bring a lot of opportunities for everyone. The first question is how you market yourself. The opportunity is there, but you need to make yourself special in the eyes of your clients. That is the challenge for all contractors.
We all need to try our best to think together with ADNOC in order to do something special for them, which can include partnering with other companies in order to deliver something special.
As an example, in Holland we found Black Bear, a technology provider for the conversion of tyres to black carbon, which is used for aluminium production. Black Bear has only 55 employees; it is a small company that has very smart technology. We took a share in this company and secured an exclusive agreement with them for the next 20 years under which they will provide the technology and we will be the EPC contractor.
With that, we brought them to Abu Dhabi and introduced them to Masdar. We had them qualified by Masdar and now we will work with Masdar to build the first plant for recycling tyres into black carbon. We are in discussions with Masdar on the execution of this plan.
If you wait for an opportunity to knock on your door, it will never happen. The opportunity is there; the investment from the government is there – however, you need to think of how to distinguish yourself for your clients. That is the main question.
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