FM sector in Saudi Arabia is worth $20-$29 billion

Alistair Stranack, partner and head of Credo Consulting’s Dubai office, speaks at the Facilities Management Leaders’ Summit in Jeddah on Sunday. (AN photo)
Updated 16 January 2017
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FM sector in Saudi Arabia is worth $20-$29 billion

JEDDAH: Saudi Arabia is the largest facilities management (FM) market in the Gulf, representing some 55 percent of spending on the industry in the region, a top FM expert said Sunday at the Facilities Management Leaders’ Summit that opened here.
Richard Naylor, CEO of DTZ, said during the first session of the event, which took place at the Jeddah Center for Forums and Events, that there is huge potential for FM service-providers in the coming years.
The FM market in Saudi Arabia has attracted international newcomers since 2010. “When I first arrived here (in 2010) there were only two other international FM providers, but now there are at least 10 or 12,” Naylor told Arab News. “They see the potential in the market and they want to take advantage of it.”
According to Credo Consulting, the FM market in Saudi Arabia is worth $20-$29 billion per annum. There is 10 percent yearly growth.
One of the tools that are deemed to move the industry forward is the use of technology, which Alistair Stranack, partner and head of Credo Consulting’s Dubai office, said is yet to improve in Saudi Arabia.
He told Arab News the first thing that needs to change is the way FM contracts are structured in the Kingdom.
“What is missing here is the incentive to improve the way you do something to benefit from,” Stranack said. “Technology only works if you use it to improve the way you do things.”
He added that many of contracts now require companies to have a computerized system to record how FM services are provided in real time.
“If you have a system like that, you have to understand how you change your business process in order to become more efficient. If you cannot get any benefit from productivity, there is no point in investing in it,” Stranack said.
As Saudi Arabia moves toward achieving the goals of Vision 2030, changes and improvements are inevitable in different sectors.
Barry Clarke, the speaker at a session highlighting Vision 2030 and its implications on the FM market, said the facilities sector is key to having three Saudi cities among the top 100 in the world, which is one of the aims of Vision 2030.
“One of the reasons I am very enthusiastic about this vision is the quest for quality,” said Clarke, general manager of Macro in Qatar and Saudi Arabia.
He added that the word “quality” was very much emphasized among the goals for Vision 2030. Quality “is an absolute must if we want to achieve the vision and improve our industry.”
He stressed the importance of including more women in the FM industry in order to achieve quality.
“The real drive for quality is women. They have an eye for quality that very few men have,” Clarke said.
The summit comes as part of a three-day event dedicated to FM, cleaning and hygiene in Saudi Arabia.


BMW plans massive cost cuts to keep profits from sputtering

Updated 20 March 2019
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BMW plans massive cost cuts to keep profits from sputtering

  • ‘Our business model must remain a profitable one in the digital era,’ chief executive Harald Krueger said
  • Total number of employees is set to remain flat at around 135,000 worldwide

MUNICH: German high-end carmaker BMW warned Wednesday it expects pre-tax profits “well below” 2018 levels this year as it announced a massive cost-cutting scheme aimed at saving $13.6 billion (€12 billion) in total by 2022.
A spokesman said that “well below” could indicate a tumble of more than 10 percent.
The Munich-based group’s 2019 result will be burdened with massive investments needed for the transition to electric cars, exchange rate headwinds and rising raw materials prices, it said in a statement.
Meanwhile it must pump more cash into measures to meet strict European carbon dioxide (CO2) emissions limits set to bite from next year.
And a one-off windfall in 2018’s results will create a negative comparison, even though pre-tax profits already fell 8.1 percent last year.
Bosses expect a “slight increase” in sales of BMW and Mini cars, with a slightly fatter operating margin that will nevertheless fall short of their 8.0-percent target.
“We will continue to implement forcefully the necessary measures for growth, continuing performance increases and efficiency,” finance director Nicolas Peter said at the group’s annual press conference.
BMW aims to achieve €12 billion of savings in the coming years through “efficiency improvements” including reducing the complexity of its range.
“Our business model must remain a profitable one in the digital era,” chief executive Harald Krueger said.
This year, most new recruits at the group will be IT specialists, while the total number of employees is set to remain flat at around 135,000 worldwide.
Departures from the sizeable fraction of the workforce born during the post-World War II baby boom and now reaching retirement age “will allow us to adapt the business even more to future topics,” BMW said.
All the firm’s forecasts are based on London and Brussels reaching a deal for an orderly Brexit and the United States foregoing new import taxes on European cars.
“Developments in tariffs” remain “a significant factor of uncertainty” in looking to the future, finance chief Peter said, adding that “the preparations for the UK’s exit from the EU will weigh on 2019’s results as well.”
In annual results released ahead of schedule last Friday, BMW blamed trade headwinds and new EU emissions tests for net profits tumbling 16.9 percent in 2018, to €7.2 billion.