U.K. Designer Scoops Gem of a Deal in Dubai
Keith Howells, newly installed chairman of London-based global design firm Mott MacDonald Group, is optimistic that Dubai’s gradual emergence from its real estate slump will boost the firm’s fortunes this year. Mott’s recent award of a design contract on the $6-billion Dubai Pearl mixed-use project supports his view that the emirate’s construction market is climbing “off the floor.”
Mott’s work involves design of mechanical, electrical, public health, fire, communications and security systems for the project’s first of two phases. Four 73-story skyscrapers framed in structural steel and reinforced concrete form the 1.9-million sq-meter complex. Standing between 32 and 110 m apart, they will be joined by a one-story-deep rooftop platform. Due for completion in 2013, the development will provide homes and work places for 21,000 people.
Getting paid for prior work by cash-strapped Dubai clients has meant that “we had to give some pretty big discounts,” reveals Howells. But the problem of outstanding payments there is now “more or less” resolved, he adds.
Holding Steady
Despite global market turbulence in the wake of the credit crisis, Mott has maintained its payroll at around 12,000 people since early 2009. Its $1.6 billion in global sales last year stayed stable from 2009, which was 5.5% higher than the previous year, Howells reports. However, stiffer competition cut profits by about 30%, he notes.
Stability in Mott’s overall staffing and sales statistics disguises a 10% drop in its European workforce, mainly in the U.K. A 12% staff increase in North America, 20% growth in East Asia and a marginal rise in the Middle East and India, balance the global total.
Global Activity
Despite pronounced declines in the U.K., the home market remains Mott’s largest. Government spending cuts, now being imposed with unprecedented zeal, threaten to undermine the firm’s highways and local government business, says Howells. But he points out that long-term deals with big regulated U.K. utilities provide some security. The private sector, on which the U.K. government is pinning its hope for economic growth, also is starting to show “stirrings of life” for Mott, he says.
The executive reports mixed prospects in the U.S. The design firm has had “a good year” in its east and west coast operations but markets were weak for its southern units. Mott operates in North America through Hatch Mott MacDonald Group Inc., Millburn, N.J., a joint venture with Canada’s Hatch Ltd., Mississauga, Ontario.
The joint venture recently acquired two small U.S. design firms, Gibson Engineers PC, Fuquay-Varina, N.C., and Richard P. Arber Associates, Lakewood, Colo. Gibson is a transportation infrastructure specialist, while Arber operates in the water sector. Together, the two firms reported $6.3 million in sales in their last year of independent operations, says a joint venture official.
But the hottest prospect for firms such as Mott remains in the resilient economies of East Asia. Its traditional markets of Hong Kong and Singapore are powering ahead. Australia, where Mott’s footprint is relatively small, is also blooming, says Howells. Mainland China, once the great hope of international design firms, remains “fairly impenetrable,” he says. But India, the other emerging giant, is sustaining about 1,500 Mott staffers. “We find it much easier to operate as a local firm,” explains Mott’s new chairman.
