With off-site construction remaining Laing O’Rourke’s preferred building method, dispute resolution and project bonding requirements are important considerations for the company’s future growth, as Middle East managing director Mark Andrews explains
UK-headquartered contractor, Laing O’Rourke, is pursuing growth in the Middle East against a backdrop of squeezed budgets and a drive by developers towards the bottom-line price.
“We are very selective as to which jobs we will work on and who we will work with,” Mark Andrews, managing director of Laing O’Rourke Middle East, tells Construction Week. “It is about trying to achieve critical mass, where we can hopefully turn a profit rather than looking at growth for growth’s sake.
“I think undoubtedly for some contractors [in the last couple of years] it was all about growth, particularly those that were looking at initial public offerings or were listing, because there was this sense that the share price was driven by the backlog. Those of us that have been in construction for a long time know that if you take on bad jobs, it does not matter how many you have got – you are not going to make any money. Instead, you are going to ‘lose your shirt’.”
With this in mind, selectivity is key for Andrews, who wants to find clients that “look at the broader value proposition beyond just price”.
“The market is still very much price- driven and that does challenge contractors that are trying to offer a high-end prospect,” he explains, adding that some developers in the region “just look for the bottom-line price”.
Instead, Laing O’Rourke adopts a design-and-build approach whenever possible. Andrews says there are several reasons that this model is preferred, the most fundamental of which is that it “tends to result in shorter bid lists”. Andrews adds: “The other reason is that it offers the opportunity to design-in a more constructive solution, so that work that can be done safely, sustainably, and with a greater scope for offsite construction. We fundamentally believe that anything that can be built in a factory should be built in a factory. In many parts of the developed world, there is now a general move for the industry to go down that route.”