Rosy future ahead for facilities management industry
Tariq Chauhan, group chief executive officer at EFS Facilities Services Group
Dubai - Infrastructure spending to lift the FM services industry to $66b by 2020
The GCC Facilities Management (FM) services industry has huge growth potential and is expected to reach $66 billion by 2020 due to higher infrastructure spending across the region, an expert say.
Tariq Chauhan, group chief executive officer at EFS Facilities Services Group, said the FM services industry in the Gulf region remains largely untapped, with an ample potential for growth and consolidation.
"Presently, just 20 per cent of the FM industry is organised, which is an indication of a sector in its infancy. This has led to a trend among clients to either retain FM operations in-house or to outsource to multiple, small time service providers, rather than adopting a policy of portfolio management," Chauhan told Khaleej Times during an interview.
Headquartered in the UAE and present in 20 international markets, EFS is the Middle East, South Asia and Africa's only fully integrated facilities management specialist. The group's 12,000 well-trained employees manage more than 250 million square feet of space spanning offices, shops, schools, hospitals and other facilities for more than 300 clients, with a 95 per cent client retention rate across the region.
Referring to a recent report by consultancy firm CREDO, he said FM contracts across the GCC are predicted to hit $66 billion by 2020, up from $26 billion in 2014.
"Saudi Arabia will lead the field, with the kingdom's FM industry poised for 13 per cent year-on-year growth. Home-grown global firms such as EFS, who able to offer a proven history and diversified services portfolio, will be well-placed to sustain the predicted growth in regional FM demand," he said.
Elaborating EFS business strategy for the next five years, he said the group will continue to look at opportunities for growth in the region to further strengthen its market standing as a leader in technical, soft and value-added facilities management services provider by diversifying services categories and service lines.
"We are currently present in 22 countries across Middle East and Africa, Turkey, and South Asia. Within these regions, we will pursue strategic expansion into key cities to further meet client requirements whilst gaining market share in long-term FM contracts.
"We aim to establish a presence in strategic markets across our core markets of Mena, Turkey and South Asia and achieve a leadership position in the organised FM services sector in our regional industry," he said.
To a question, he said the acquisition of SecurePlus coincides with huge growth opportunities that exist for managed security services here in the UAE where demand for managed security services is high and rising.
"The acquisition has helped us integrate the provision of security services as part of the versatile, bespoke service offerings of EFS Group in line with our strategic vision to provide a truly integrated facilities management services to our clients.
"Our strategy is to expand the operations of SecurePlus across UAE as part of the first phase and to later introduce security services operations in other lucrative key markets as a new business sector complementing EFS' existing IFM operations," he said.
Chauhan said next few years will see EFS further strengthening its credentials as a leader in technical, soft and value added facilities management services by diversifying its services categories and service lines.
"This means that we will weigh several options including plans to pursue strategic expansion through acquisitions in key emerging markets in the wider Mena region and South Asia."
About the group's potential initial public offering (IPO) and listing of shares, he said it would be announced at an appropriate time.
"As a leading global FM solutions provider, we at EFS are continuously exploring strategic options that will help us in our pursuit of growth across the region and beyond. Any such initiatives will be duly announced at an opportune time in the future," he said.
To a question about the group's current backlog, he said EFS today manages over 250 million square feet of built-out space for over 300 clients with an ongoing contracts backlog in excess of Dh3.2 billion, the highest ever in company's 16-year history.
"The record level of contract backlog reflects the increasingly central role being played by facilities management firms across the region. The growth in the backlog can be attributed to EFS' significant contribution to prudent optimisation of operational costs over the commercial life of a development which helps to prolong its life cycle and realise value-added savings."
About the key challenges being faced by FM industry, he said there are mainly three challenges that facilities management service providers face in the region:
a) The majority of the FM services providers hail from the unorganised sector with limited experience, knowledge and skill sets which are on par with global best practices and standards. This undermines the important role that IFM service providers play, especially in partnering with businesses to achieve operational efficiency and longevity of assets
b) Talent acquisition, training and retention are the greatest obstacles to growth for IFM companies and directly impacts ability to efficiently and effectively manage complex projects, especially as we compete with the growing demand for qualified, skilled manpower with sectors like engineering and construction
c) FM service providers are usually engaged only during the handover phase of a project. This has to change and FM providers need to be involved in the design stage to ensure that building designs are compliant with global standards of energy efficiency and industry best practices. The costs of implementing these can be substantial post-handover, which further affects the profitability of assets during their lifetime.
"The supply of qualified talent with the right mix of experience, skills, attitude and motivation remains critical to the future of EFS. We ensure that we offer our employees a structured career path with clear progression lines and avenues for continuous improvement of their skills through competitive, mandatory training," he said.
To a question, he said EFS Facilities Services has established a dedicated Training and Development Centre in Dubai to enhance workforce's capabilities, skills and competencies as well introduce new skills to address the evolving needs of clients and industry. The centre is affiliated with International Facility Management Association for the preparation and delivery of critical training in key markets such as UAE, Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, Egypt, Lebanon, Jordan and India.
"Our Training and Development Programme is established and designed based on our staff needs analysis and competency level assessment. We provide training in different types of services such as hard services, soft services, soft skills, facility management services, and the like," he said.