The Covid-19 pandemic has accelerated disruptions in the GCC’s construction industry, creating a mix of opportunities and headwinds. Many of these changes –such as industrialization and digitalization– were already taking place. To navigate the ‘new normal’, the region’s construction ecosystem needs to make strategic business decisions. Leading regional design-build contractor AMANA shows the way with a bold, digitally driven growth strategy based on leveraging key trends and changing industry dynamics.
Riad Bsaibes, President and CEO of Amana Investments, said: “Construction companies have to invest in digital transformation to future-proof their business and boost profitability in a dynamic market. We are also seeing a greater leaning into sustainability. One of the most significant trend stories of 2021 will be the convergence of manufacturing, technology and construction. We will see modular construction gaining traction, as it reduces waste, cuts projects costs and timelines while complying with new on-site health and safety protocols.”
More Off-Site Construction
As projects race to completion amidst unprecedented challenges, modular construction has emerged as a viable solution. It offers a safer building environment, decreasing the need for manpower by 30%, making it an ideal solution for the post-pandemic environment. Manufacturing construction potentially reduces material waste by 30% and improves the work safety environment by up to 70%, as compared to traditional construction. These numbers are proven, not projected. AMANA is also launching a platform for seamless off-site construction, which includes its brands DuBox and DuPod.
Moving Towards Circularity
The construction industry is responsible for one-third of global carbon emissions. To motivate the building and construction sector, GCC regulators have enforced building codes such as Estidama, so the sector moves towards circularity. For AMANA, sustainability is a key business goal, achieved through digital tools, standardized manufacturing techniques and processes in construction. AMANA is strengthening its solar and energy efficiency business to further support the region’s green agenda.
The World Economic Forum estimates within 10 years, full-scale digitalization could unlock savings between $700 billion to $1.2 trillion in design, engineering, and construction. Hence, the construction sector’s future success depends on its ability to adopt digital solutions and evolve in sync with market needs. AMANA has invested considerably in digitizing the construction process by migrating to a platform that enables integrated project delivery.
The Revit BIM platform from Autodesk has strengthened operations and fast-tracked project development, given the demands for sustainable construction and Estidama guidelines. AMANA’s use of BIM technology shortens production cycles, smoothens engineering and design flow, and fosters collaboration amongst various departments. Architects, structural engineers and builders to work from a single integrated digital model that contains all information essential to the project. Working on digital twins is the future of construction.
Externally, the digital revolution and the focus on food security in the region has also unleashed Design-Build opportunities for AMANA in data centers, e-commerce fulfillment centers, agritech, and cold storage facilities.
The pandemic delayed projects due to various new safety measures, posing liquidity challenges to developers and contractors in a softened market. The industry continues to grapple with cash preservation issues across the client and supply base. Delays are also likely to result in increased disputes over the contractual completion of projects. The exit of major players in the UAE has impacted current projects, supply chains and banks, creating a market that is ripe for consolidation. From being a fragmented industry with several small players, the region’s construction sector is moving towards consolidation, with larger entities that can take advantage of economies of scale.
As industrialized construction and technology adoption increases, there is a growing gap between the supply of labor and the digital skills needed. Talent acquisition and development will be significant challenges, especially in Saudi Arabia’s growing construction sector. AMANA had a head start on talent acquisition in the kingdom, where it hired local Saudi talent with manufacturing skills. Attracting the best and brightest people, retaining them and keeping them engaged and motivated, remain a significant challenge. Increasing gender diversity within the workforce, fostering an appealing organizational culture and increasing automation are key focus areas for construction leaders like AMANA as it forges ahead in 2021.