Steady as she goes
General manager Masood Raza describes UAE-based Jumbo Engineering as a medium-sized MEP contractor. The company employs around 350 people and generally bids for contracts in the region of AED50-70. Raza says there is plenty of scope for it to growth at this end of the market. He adds that revenue will be up 10% year-on-year come the end of 2016, but is reluctant to give the top-line figure.
“Jumbo Engineering, a part of the Jumbo Group, has shown steady growth over the recent past, ” says Raza, who has been in the role four years. “Consistently over the last three years we have exceeded our targets.”
Raza says the company has managed to continue growing by being selective about the type projects and clients it engages with. For instance, he says the contractor tends to shy away from residential schemes “because those projects are open to almost everyone”.
He says the MEP contractor is instead experiencing success by bidding for “fast track” projects in the industrial sector.
“We find that these types of projects are well financed from the start and are sure to finish in a quick timeframe,” he says. “And because we have been in the market since 2002 and also have the Jumbo Group behind us, we are carrying out this work successfully and retaining our clients.”
One of Jumbo Engineering’s major ongoing projects is for Abu Dhabi Ports Company (ADPC). Alongside main contractor Amana and lead consultant WSP | Parsons Brinckerhoff, it is constructing 62 warehouses at Khalifa Industrial Zone (Kizad). Raza says that industrial zones such as Kizad are providing ample opportunity to pick up work.
“The key is to prove to the main contractor and the client that you can deliver on what you promise and build on that trust to foster a long-term relationship,” he says.
Raza acknowledges that the market has become saturated with MEP contractors and thus it is imperative for companies to diversify their project portfolio in order to survive. He points to the growing retrofit market as a case in point. Etihad ESCO (Energy Services Company), for instance, is enabling the energy performance contracting market in Dubai to develop energy efficiency projects targeting more than 30,000 buildings. The aim is to cut energy consumption by 20% by 2020 and 30% by 2030.
“The retrofit market is a big opportunity and that’s what we’re trying to tap into with our AMC (annual maintenance contracts) team by adding some value engineering to existing buildings,” says Raza.
“This works at different levels. We have to work with the consultants to convince them of the technical aspect of the solution we are doing. And we have to show the owners the operational cost saving with sustainable retrofit.”
Jumbo Engineering is also finalising its registration with Dubai Electricity and Water Authority (DEWA) which will enable it to bid for solar projects.
“A big shift in policy by DEWA recently is that its allowed on-grid solar systems which I think is a paradigm shift,” declares Raza. “Because of that a new area of opportunity has opened up.”
The intention is to link up exclusively with a supplier in this sector in the same way that it has an agreement with Canadian firm TORO WATT for HVAC equipment and India’s Blue star for cold storage products.
Raza says Jumbo Engineering is encouraged by growing activity in the hotel sector, pointing to the Expo 2020 in Dubai, where organisers expect more than 25 million visits during its six-month run, as a catalyst for hotel building.
“Certainly we are seeing hotels being constructed in the area of Dubai South close to the Expo site,” says Raza. “So we understand that there will be an even bigger push to get these hotels built as the Expo draws nearer.”
He also points to hospitals as another growth sector.
Meanwhile, he acknowledges that there has been a tightening of payment terms from some suppliers in the market but says that being part of the Jumbo Group means suppliers know they will be paid on time by the company.
“The differentiation is our financial strength,” says Raza.
He is very excited by the potential of the Internet of Things (IoT). Jumbo Group’s enterprise solutions division (ESD) is already heavily involved in this.
The division offers a full spectrum of professional services and managed services to help clients plan, build, support, manage, improve and innovate the full lifecycle of their
Raza says the ESD has the ability and experience to take on client requirements from entry level, break-fix support to complex managed and professional services – to help clients drive down costs and increase productivity.
As always however, Raza is not getting ahead of himself. He is happy with the growth of Jumbo Engineering and the opportunities in the market, but says he will not over stretch the company’s resources in order to chase large numbers
“From our point of view, we are very busy closing those projects and we have a strategy of not having too many projects at a time,” he says. “The Group’s guidance is that we aim for steady and sustainable growth.”