A pioneer in responsible development, Red Sea Global (RSG) is one of the world’s most creative and imaginative developers, delivering projects that actively enhance the wellbeing of guests, communities, and environments. As the developer behind The Red Sea and AMAALA, two luxury, regenerative tourism destinations, RSG naturally has a wide-ranging requirement for professional, quality-driven suppliers and contractors. But how do such companies enquire about the many opportunities available and how do they make that first all-important contact? We asked Ben Edwards, Group Head of Cost, Commercial & Procurement at RSG, to fill us in on a few details concerning current needs, the benefits of working with RSG, and how to reach out to discover more.
Saudi Projects: What does RSG look for in contractors and suppliers; what type of companies are you looking to work with?
Ben Edwards: We have got such a wide variety of procurement requirements because we’re not only building but also operating the assets so it’s extremely wide-ranging. Capability in the Kingdom is front and center of everything we do – we want to engage with companies who are capable of delivering the requirements we need. There can be a tendency for people to promise you things and say, yes, we can do anything, but when it transpires and you enter into a contract with them you have performance issues, etc.
So we’re very much focused on a proven track record, delivery in the Middle East region, and alignment with our cultures and values in terms of environmental and sustainability credentials, and Saudization.
Everything is untouched by human hands and we want it to stay that way during and after construction so that people can come and enjoy the natural environment
SP: Do you take certifications such as ISOs into account?
BE: We do, yes, particularly on the environmental side of things. That’s a very high priority for us because of the nature of where we’re working.
These are very unspoiled sections of the Red Sea coastline. They’ve been closed basically, so nobody’s been able to go into the sea and damage the coral. Everything is untouched by human hands and we want it to stay that way during and after construction so that people can come and enjoy the natural environment, both land and marine.
Constructing Contractors’ Accommodation
SP: That must be a challenge in itself – the location – getting suppliers and contractors?
BE: It is, but we’re blessed because we have quite good connectivity with the existing local airports. We’ve effectively built mini-towns for our staff. With The Red Sea destination we have built in advance accommodation for the operation phase of the development, where hotel workers will live, and we are using that in the early stages to house some of our construction staff.
In AMAALA we have constructed a huge temporary camp for accommodation with a capacity of 15,000. It’s roughly 80% operatives and 20% staff, and we’re in the process of signing off to build accommodation for the next 5,000 as well, so it’s all happening.
SP: A lot is pre-manufactured isn’t it?
BE: Yes, the temporary accommodation at AMAALA is a sort of portacabin-type village; the Red Sea buildings, the permanent buildings, are concrete frame buildings.
We’ve used a lot of off-site manufacturing methods wherever we can because of the remote location of the site, which gives certainty of delivery and quality.
And when you need to bring together the labor to put it all together, it’s easier to be able to bolt it all together like a Lego® set than to do stuff the old-fashioned way with hundreds of workers.
Getting in Touch
SP: What’s the first step companies should take if they want to work with RSG?
BE: We register all of our vendors and we have a very active vendor management department. So when opportunities for tenders come up, we already have a shortlist of companies. For the companies to be included on this shortlist, they need to go through our vendor pre-qualification process, which is all done online through SAP Ariba, and it’s accessed through the RSG website.
SP: What are the benefits of working with RSG?
BE: We’re very conscious of the pressures within the marketplace in the Kingdom of Saudi Arabia at the moment. We’re one of several concurrent giga-projects, all competing for the same supply chain, and we’re all fishing from the same pool in terms of the resources that are available to allow us to deliver our projects.
In terms of what makes us attractive to external parties, and why they would come to work for us instead of other projects, we’re taking a slightly different approach to our procurement path for the construction side of things. We’ve adopted a construction management approach, so rather than engaging a series of main contractors – main contractor number one builds hotel number one and then main contractor number two builds hotel number two, and we manage the main contractors – we take a construction management approach where we actually engage the specialist trade contractors ourselves directly.
Consequently, as a specialist trade contractor, there are huge advantages, including the fact that instead of getting bogged down with the bureaucracy of working with a main contractor and then the main contractor working for an employer, they are working directly with RSG, the employer. This means that they have got direct links to the paymaster, which is us, and they are being directly managed by our staff, so it makes it a much flatter organization from the trade contractor’s perspective, with the benefit that there’s one payment that is coming from us to them for the work that they’ve done on a monthly basis; it’s not going through a middleman or intermediary. We pride ourselves on meeting or bettering our contracted payment terms for the supply chain and we don’t have a middleman between us and those trade contractors, so that’s key when looking at RSG and other projects that are out there.
In Amaala we have constructed a huge temporary camp for accommodation with a capacity of 15,000
Supply Chain Events
SP: Obtaining materials has been a bit of a challenge hasn’t it, particularly with so many projects on the go at the same time?
BE: Materials were a huge challenge during Covid and immediately post-Covid. That wasn’t something that was particular just to this market. The world stopped very suddenly for Covid, but then it re-started a lot quicker than everyone thought it was going to and it had a big impact on the supply chain globally.
I think it’s fair to say that generally, the global-type factors started to steady in the second half of last year. Obviously, the Ukraine situation affected things at the beginning of last year, but things have now started to settle down. We’re not seeing huge problems in capacity and availability of materials in the market, but it’s about making sure that you’re set up and you’ve got as much as you need when you need it. We’re planning in advance. Like anywhere, there are some trades that we struggle with in terms of capacity within the Kingdom, so we are actively looking at expanding our supply base into other countries within the region.
We took part in a supply chain event in London in November, and we’re doing another one in Istanbul during Q1 this year. In addition, we’re also looking to tap into a bit more of the market in Qatar now that the football stadia and hotels have all been built. And we’ll look at other countries within the region as well, probably doing something in Jordan and Egypt as we go into Q2. We are broadening, we’re buying some stuff from the UAE at the moment because it is a developed market, but it doesn’t come without its problems because there is a big problem with liquidity in the UAE. People promise things but when push comes to shove they haven’t got the financial capacity to deliver the goods or services they’ve promised. We’re having to do a high degree of due diligence concerning the financial capacity of the people we are talking to in the UAE market to avoid problems for them and problems for us.
We’re doing a supply chain event in London in November, and we’re doing another one in Istanbul during Q1
Looking for Anything and Everything!
SP: Which industries and specialisms are you particularly looking out for at the moment?
BE: It is literally everything to do with construction. It’s so broad. To give you an example, I’ve signed off procurement-related paperwork for seaplanes, scuba diving tanks, sailboats, fit-out contractors, steel frame contractors, and corporate services for vehicle leases – it is just everything. We’re building two huge destination resorts from scratch and we need anything you can imagine that goes into them.
SP: I guess you’re looking for people and companies who are in it for the long haul?
BE: Yes, in terms of the supply chain and employees.
We’re graced with a superb pipeline of current projects, but the aspirations of the PIF on the Red Sea coast will see further developments that will come into RSG in the future. So we’re very much committed to the long-term.
We look to ensure that we’re maximizing engagement with the entities that are already active here in the local market, but we’re also looking forwards in terms of investment opportunities for people to come in and establish factories and production capabilities to manufacture things that we are currently reliant upon importing from overseas. For example, a lot of our loose furniture, fixtures, fittings, and equipment for the hotels are being sourced in the Far East because there’s a lot of manufacturing for those products in that part of the world. So we’re encouraging companies to think about investing in the Kingdom with production facilities that can support our projects and some of the off-site manufactured items that we use regularly, such as swimming pools, pre-cast concrete, and bathroom pods.
We did a quick calculation before Christmas, and we probably need 50,000 pods over the next seven years! That’s a significant number of pre-fabricated rooms for successful bidders, so we’d like to collaborate with people long-term for those.
SP: And finally, for companies and suppliers, you simply say, get in touch if you think you’ve got something to offer us?
BE: Yes, absolutely. Reach out to us through the portal and attend one of the supplier events that we’re doing, including some local ones within the Kingdom, during the course of the year. We’re happy to hear from anyone that can provide us with things that we need … which is more or less everything!