“Asian construction markets too competitive for foreign contractors”
In conversation with TAV Middle East’s director, Yusuf Akcayoglu.
Yusuf Akcayoglu, director, TAV Construction (Middle East)
Yusuf Akcayoglu, director for TAV Construction’s Middle East operations talks to Big Project ME about the rise of Asian construction markets such as India and China, and how their firms perform in the GCC. Akcayoglu also elaborates on the challenges local GCC firms might face while attempting to expand across Asia’s construction landscape.
How is Asia performing as a growth market in comparison to global standards?
In my opinion, the global shift in terms of wealth we’re witnessing is towards east towards China and India and, it has been so since the last five years. Rising income levels have added to the number of middle class in these countries, and these people are offering their connection points to a greater part of the world. Geographically, the GCC is the best location for investors from, abroad, like Europe for example.
Will local GCC or Middle Eastern firms benefit from entering Asian construction markets?
All foreign companies are having a really tough time penetrating the Indian and Chinese markets unless they bring a very competitive advantage on a unique project. In the traditional construction segment, nobody can compete with local Asian firms in their own town. That’s my opinion. Maybe they even come to the GCC because it is a less competitive market for them than back home.
How do these Asian firms fare in the region?
I don’t know of any Singaporean firms in the construction market here. There might be a few Malaysian ones and a few Japanese ones in the heavy industrial sectors. I’d say most players have been looking at China and India in their growth forecasts. There are definitely some well-known Indian and Chinese companies in the market which are competitive and provide quality construction services. There are two or three major players from India which are doing well here, and the same also goes for China. Their internal (domestic) market is too competitive for foreign contractors, but they themselves obviously see benefit in expanding their operations across the globe.
How do Asian and other global construction firms from the Middle East, Europe or America usually collaborate on projects?
Typically, Asian firms invite foreign companies to form a joint venture with for, say, a high-rise project, for which they might lack the technical knowhow. Or, they invite international firms for specific iconic projects like supertalls, where their local expertise might not be sufficient.
What do you predict the future holds for Asian construction firms in the GCC?
There’s a ripple effect on construction if, for example, a country’s aviation sector grows. Tourism will not only mean increased passengers, but also more airports, terminals, metro stations and highways. The demand for these means Asian companies will have more opportunities in the GCC.
