Bashar Abou Mayaleh, the outgoing managing director of Concrete Industries Complex, on how COVID-19 has exacerbated the pressures on the concrete industry, and what sort of legacy he leaves behind at his company
Having been at the helm of Concrete Industries Complex (CIC) for the last 22 years, Bashar Abou Mayaleh has seen many peaks and troughs in the concrete industry. Despite the many challenges and difficulties faced along the way, he insists that each of those experiences, no matter how painful, taught him and his team valuable lessons that they have used to good effect.
That is why, as he enters his final weeks as managing director of CIC, Abou Mayaleh believes that 2020 will be a hugely important year for CIC’s future, despite it being one of the most challenging on record.
“Life always gives you golden chances to learn new things, and this is the best thing to come out of any crisis. We really learnt a lot of new things (from 2020),” he says, before he brings the curtain down on his career at CIC. “Firstly, in terms of our safety and environment response to the crisis, CIC did an excellent job in taking all the precautions. We educated our people about the pandemic and how to deal with it, and we were able to create a very nice culture where everybody is responsible towards dealing with this pandemic – that they’re responsible for their health, the health of their colleagues, and towards the health of the community. There has been an amazing level of commitment from CIC staff and workers towards how we responded to the requirements of the pandemic.”
However, from a business point of view, things were not quite as smooth. Abou Mayaleh explains that a number of projects were abruptly put on hold or cancelled, which had an impact on the company’s financial and operational models, due to the huge overheads and difficult break-even points.
“We have had a lot of new ideas about controlling and reducing our costs. Some of the actions were painful, because we unfortunately had to lay off some employees. But in general, the balance between the available revenue and our costs was beyond our expectations. The response from our staff and workers to put forward a lot of initiatives towards cost control was amazing.
“But the challenge was in the precast sector, because it is subcontracting. At Emirates Beton and Hard Block, as suppliers, they had relatively fewer challenges, but as subcontractors they were already originally suffering from unfair subcontract agreements even before the pandemic, like many other subcontractors in the industry.
“They are suffering from poor cashflow created by those unfair contracts, where everyone in the chain can delay your payment as a subcontractor, and here I’m talking about subcontractors in general,” he states emphatically, highlighting what he calls a crucial issue facing the subcontracting industry.
“We could control the operations in a good way, relatively speaking, and the results have been fantastic for CIC, except that we took a hit because of some bad debts. A few major players in the market have gone bankrupt or stopped their payments, and we have had one or two defaults due to this bad debt. Without them, everything was beyond what we had targeted, in fact.
“My personal belief is that the global economy will take time to recover, but we are optimistic. Unfortunately, and I don’t like to say this, many of our competitors are in a very bad shape. I always believe in having a strong industry because that is much better for everyone. But now, many of the concrete producers are suffering a lot.
“We find ourselves in a much stronger position, which will allow us to continue taking a bigger share of the market. These days, the size of the job are reducing when compared to 2019, but we’re signing some big projects and are really optimistic. In fact, we are entering 2021 with the biggest backlog that we’ve had for the last five to six years,” Abou Mayaleh says.
Despite his company’s success, he remains adamant that finding a way to resolve the issues around contracts and payments, and strengthening the concrete industry as a whole, should be of the utmost importance for the construction sector.
He points out that CIC has tried to lead efforts to bring the industry together find a way to resolve this conflict but has met with little success.
“We kept trying to meet with the industry to discuss how we can give the industry a better chance to serve the construction sector. That would enable the industry to be in a very healthy situation, mainly financially, but unfortunately, with less jobs in the market, clients and main contractors will keep imposing tougher conditions in the contracts, so I’m not very optimistic.
“I think that the government authorities must interfere to emphasise that these kinds of subcontracts, with all these unfair conditions, are void and unacceptable. There has been some discussion with Dubai Municipality recently, and they have been thinking about creating some kind of unified subcontract agreement, but I’m not sure about the quality of inputs to generate such a thing, and how long it might take. It might take another two or three years, and by that time, it might be too late for some companies – in fact, it’s already too late for some
companies,” he warns sombrely.
“This is a very big subject. If you recall over the last two years, we have witnessed the disappearance of big subcontractors in the electromechanical, precast, steel structure, glass and aluminium sectors. One of the biggest reasons behind this is the unfair subcontract agreements.”
Abou Mayaleh states that with subcontractors being forced to take on the risks of the client and main contractors, payments can often be delayed for the slightest reasons, and that lengthy liability periods will only increase the pressure.
“For example, my scope of work on a project would be concrete. I finish the first on the project, but I will have to wait till the finishes are being applied to be paid. My retention should be one year from the end of my scope of work, but in general, for all subcontractors, their retention can be three to four years. This has been a big problem, and with the pressure of the economic situation, it’s only increasing.”
Despite the many challenges facing the industry, Abou Mayaleh can be content in the fact that he’s leaving CIC in a healthy and progressive state, having spent much of the last 22 years working to develop the company’s technological capabilities, as well as investing in the next generation of engineers, technicians and professionals.
Over the years, CIC has developed relationships with both local and international players to find the best and latest advancements in the concrete industry, conducting research to find new mix designs and enhancements, all to deliver the best performance and product to its customers, he says.
Perhaps his biggest legacy, however, is the people that he is leaving behind.
“I’ve always considered my just as a member of the team. I was always just a big brother and I took care to create a new generation of leaders. There is no good management if there is no succession plan, and that that has never been far from my mind. I was always looking to create a new generation of leaders.
“This has been a big part of our success – our belief in bringing together advanced and flexible procedures, while having financial control, and always being progressive. One of the things I’m most proud of is that I’ve always believed in supporting my employees and their career growth.
“I believe that the next generation of leaders is qualified and ready to continue our success and take it to new horizons.”