The building-trade Besix is not a stranger in the success story about the expansion of Dubai. The Belgian building-trade has established a lot of impressive projects in the Middle East. They built for instance the highest skyscraper in the world, namely the Burj Khalifa which has a height of 828 metres.
But more than ever it looks like the project will become unprofitable. One of the causes is that Besix had to make the skyscraper 100 metres higher than eventually agreed upon by the client. Another reason is the bankruptcy of the Emirate Dubai, which makes part of the 7 United Arab Emirates, has resulted in a downfall of many future projects. The Belgian building-trade that counts 17700 employees has lived a certain time in uncertainty.
Hence to the drop out of several planned projects in Dubai last year, a large number of original orders were ultimately cancelled. The value of the orders felt back from 3.6 billion Euros in the beginning of 2009 to 2.4 billion Euros at the end of that same year. Logically this became visible in the turnover figures. The company knew a forceful fall in turnover from almost 2.1 to 1.92 billion Euros.
Cheerfully, since the beginning of 2010 the restlessness has faded away because of a number of new projects which came in. These projects will especially be worked out in Abu Dhabi, which is part of the United Arab Emirates as well. The other day it got into public that Besix is set on building a giant hospital there. With its value of 940 million Euros this is the biggest contract ever for the Belgian building-trade. Consequently to the incoming orders the mood has changed completely. Also the value of the order book has risen again to 3.4 billion Euros. This means that the budgeted turnover will be surpassed by enormous numbers.
Moreover, the Besix top executive Johan Beerlandt has announced earlier that it would not be such a tragedy if the company wouldn’t be able to clime out of the costs. He sees the situation as an opportunity which has opened doors to other and perhaps even bigger contracts. Recently the company signed a modest quantity of new skyscraper-contracts. For example in the office quarter La Défense in Paris they are set on building a new complex of about 162 metres high. In addition, they are also going to build the new headquarters of the Abu Dhabi oil company. But we’re not just there yet; the company will also build a VIP terminal in the Abu Dhabi Airport and also has the creation of four artificial islands on its schedule.
If I take a look at the matter from every angle, in my opinion this has been a exceptionally brave gesture of the top executive of Besix. He looks at the different unprofitable projects from a very contrasting type of view. With reference to entrepreneurship, one of the main values is long-term vision if we take a closer look at the theoretical starting point. On the other hand, when we take a look at the no-nonsense way of business, every company has to deal with the short-term upshot too. Only when this is also being taken into account, the company will be able to bridge over short-range costs and threats and therefore avoid liquidity problems. Seen the fact that the company exists for over 100 years, it has already had the possibility to pile up some reserves.
Finally, I share the opinion that this so-called accident carries a lot of opportunities. I am also well-aware of the fact that with this acquired image because of numerous projects in Dubai, they have built up an impressive reputation and corporate image. Therefore, I’m truly convinced that Besix will obtain even more million Euro contracts for other projects in that same region. Hopefully the company will be able to bridge over a difficult year and in the same time be launched to grow as a construction firm.
Source: 'Na mega-toren nu mega kliniek voor Besix'
Congratulations to Besix! This is great news for the image of the Belgian construction industry.
BeantwoordenVerwijderenIn addition to the article above, we should also keep in mind that many thousands of workers live in bad conditions and work for low wages. Most of these workers are immigrated Africans or Asians who work far away from their families, to send them a small amount of money for many hours of physical labour. Besix probably works with hired companies in these countries so they can wash their hands in innocence. Who's bread is eaten, who's word is spoken. Ofcourse, this company is not the only company which does it. I also believe it's impossible to stay competitive and not participate in these kind of employment methods.
To conclude, let's not forget the weak financial position of Dubai, (as you mentioned, not Abu Dhabi) which in some conditions will bring the company to the necessity of a good payment insurance for future projects in this region.