Wednesday, August 10, 2011

What do you look for in a local Qatari Partner?

I have been thinking what actually do foreign companies look for in a local Qatari partner. With so much interest from foreign companies who are looking for a sponsor, an agent or a partner, I decided to brainstorm what seems to be the key attributes and considerations when looking for a partner that adds value to your business. What determines the value of this local partner? I have to add that every business looking for partner should have an idea what you want from him, what value you think he can bring to the table i.e. opening doors to an important client or contact, getting advance market intelligence, facilitating your business development and navigating through local bureaucracy..the list goes on.

With my past experiences helping companies to look for a local partner since 2009, i think the 'magic formula' comes in the form of 5Cs or a checklist of 5 important attributes that determine the value of the partner.

1. Compatibility of Your Product or Service with that of the local partner

Do you prefer one already in the same kind of business or you prefer someone who is new? If this local partner already has a fire equipment distribution business and the necessary licences, do you want to work with him? If the local partner owns an IT consultancy business, do you think that this is best arrangement for you to also leverage on his business and his contacts? To help you, answer what value does his product and my product creates. If you think it is synergistic and creates a win-win value, he could well be the partner you are looking for.

2. Chemistry of the local partner and yourself

Why did you get married to your wife today? Can you explain the kind of chemistry you both have for each other before deciding to get married. Sometimes, people just click and they get married to each other as they shared certain common life values and hope for the future. I believe chemistry becomes even more important for the local partner and you because we are talking about cross-culture, difference in values, traditions and outlook (and hence the future directions of the partnership business). How do you evaluate your chemistry with a local partner. Is it just like 'love at the first sight'. In arab cultures (bedoudin culture), I sometimes observed that chemistry is 'present' when you are ushered into his big office and both of you discuss about anything under the sun except business. Perhaps, by the time you do get down to business, the chemistry is already 'there', that he liked you and wants to deal with you.

Chemistry might also takes time to build up between the two of you. Given Arabs' famed hospitality, they would also invite you for dinner just to get to know you better and to evaluate the chemistry between the two of you. If you are not sure whether to proceed with partnering him, delay signing up with him immediately. Ask to see what value or business he can give to you as goodwill to earn your trust. If he is sincere, likelihood he will do that. Chemistry actually helps in securing long term relationship and stability of your partnership, more than anything else.

3. Connections of the local partner

In Qatar's close-knit context, this is really how powerful this local partner's inner circle's network. A highly connected local partner is highly influential as he can really climb mountains to get that elusive contract foryou by leveraging on his close-knit network in his private 'Majlis' (which means "a place of sitting" in arabic). They get their regular dose of market-intelligence from their guests attending their Majlis and also used the Majlis to get business done among themselves. I attended a few sittings of Majlis and it is really a great way of knowing people and seeking their help to open doors for you.

High at the apex of power is the Al-Thani, elite Royalty family. Not just in politics, they are also a powerful force in business, with several of them who are business owners of large listed companies and private companies that are prevalent in all parts of the Qatari economy. Not all Al-Thani members are influential, you need to look at their family branch and understand their lineage and family dynamic relationship with the current ruler. I shan't not go into too much details.

After the Al-Thani, you have the powerful merchant families which are the captains of the industry and their influence and financial backing comes from the powerful members of Al-Thanis (who prefer to stay in the background and low-profiled). In return for their allegiance, the merchant families are given favours by certain powerful Al-Thani members. You need to be aware of the different tiers of merchant families you are seeking help, decide which are the ones that matter more to you. Why are connections important? Connections contribute to the probability of success. That is why some foreign companies pay through their nose to get the elite al-Thanis. If you are a small business, it might not make sense to go with the Al-Thani or top tier merchant families. And connections would play a lesser role.

4. Character of the local partner

How do you judge the character of your local partner. Try talking to his close friends, associates or even employees and existing customers to seek feedback what kind of a person he is. Usually, you might only meet your local partner only once or twice and in a very brief meeting that's about all the time you have with him. Instead you are asked to discuss the details of your partnership with his managers. So are you comfortable with that. This is the case if you are dealing with someone who is really from the elite group, as I mentioned above.

Do your due-diligence by checking with other foreign companies that he is a partner- you might get valuable information as to his character (honesty, helpful) and his integrity and how does he treats his existing partner. Ask yourself "Can I get help and time from this person when I subsequently meet with problems. Am I getting value from my partner? " Enough said.

5. Commission as charged by the local partner

Lastly, how valuable the partner is also determined by how much he charges you for being your partner. Makes sure you get what you pay for, by  going through carefully the above four points I have mentioned. If you are paying him this much, you need to be sure that you should be getting good value for your business from him. For the case of a inactive partner (we called him a sleeping sponsor), market rate can be as low as QAR25,000 to QAR40,000 per annum on the low side. More commonly, I see people settle for around QAR100,000. On the high side, a sponsorship figure of about QAR500,000 per annum or 5% of revenue and higher is not uncommon. If you are dealing with the (top tier) elite families, it would also be in the millions of dollars based on a cut of your big contract that he has helped to secure.

In summary, the value of the local partner is a multiplication of all the 5 Cs I have just highlighted.

Value of the local partner = Compatibility X Chemistry X Connections X Character X Commissions

Good luck in finding your partner in Qatar. If you have other suggestions to add to the list, you are welcome to contribute.

Will Qatar be an exception amid the threat of global slowdown and crisis

We are probably looking at a potential global economic crisis if the recent stock market's volatility is a good leading indicator.The price of oil closed on 9 August 2011 at about $79 a barrel – the lowest since last September. Is this a sign whether oil price will be kept steady around this level or risks further plummeting if the world economy does goes into a recession. How will this crisis (if it happens) affect Qatar, given its heavy dependence on oil and gas of nearly 56% of GDP?

I seem to hold the medium-term view that Qatar will likely continue to be the bright spot for next seven years. While strong oil prices are important to Qatar's revenues, its abundance of natural gas reserves (910 trillion cubic feet) and existing long-term gas contract prices might be the key to Qatar's strong resilience and financial ability to pay for its World Cup's infrastructure spending estimated at billions of dollars. If we looked back at 2009, we witnessed how Qatar managed to attain its robust economic growth of 9% despite world-wide economic downturn. 

What Qatar has done prudently is the current moratorium imposed on further development of its vast North Field gas reservoir, to be lifted in 2014. Qatar can easily lift the moratorium to help pay for its billions dollars worth of projects to stage the 'best ever World Cup' in 2022. In addition, its growing population and expanding infrastructure is in need of further investment for energy and water needs.

This, I believed is the Qatar's trump card to ride out the present crisis or no crisis.

Tuesday, August 9, 2011

Qatar Railways invite interest to participate in design and construction of Doha Metro (31 July 2011)

Basic Information

I attended one of the industry awareness events organised by Qatar Railways Company (QRail) in May 2011. Below are key points I noted about the projects' rationale and timeline:
  • Key reason for the Railways and METRO is driven by the FIFA World Cup 2022.
  • Total Budget for the Railways projects projected to be QAR130 billion (US$35.7bn)
  • The METRO is required to ease transportion woes for World Cup 2020 and cope with ever growing population. The complete railways system is expected to be in place in 2026.
  • All 12 World Cup Stadiums will have a METRO station.
  • QRail is the authority to oversee the management, operation and maintenance of all the local railways and lead coordination efforts with regional and international rail networks.
  • QRail is extending an invitation to all contractors with experience in the design and construction of railways including both major underground and elevated civil works. Refer to the advertisement below for details.
  • Enquiries can be directed to
EOI appeared on 31 July 2011 (Closing date 11 Sept 2011)

Pictures of Future METRO and Stations (Source: Qatar Railways Company)

Scope of Services, Works and Supplies identified for Qatar Railways Project
(Source: Qatar Railways Company)

Summary of services and scope of works
Plenty of Challenges awaits Successful Tenderers
(Source from Qatar Railways Company and own assessment)

No doubt this will be the most ambitious and challenging project. Potential companies need to take into account these challenges:
  • Large QAR130 billion Project coupled with immovable construction timeline. You only have 8 or less years to complete the phase 1 (has to be operational before 2022).

Construction Timeline (2012-2020)

Specific Timelines for each METRO lines and Long Distance Rail

  • Tenders available only to Internationally renowned companies with local strategic partners (remember, you need to get past the prequalifications stage).
  • Competition will be intense. Over 700 representatives signed up for these industry awareness events organised by Qatar Railways Company that were held in May and July this year. The latter is serious about asking all interested companies (international and local) to assemble their own consortiums. (As at 8 August 2011, QRail has sent out a list of all the contact information of companies' representatives who attended the awareness sessions). 
  • New Qatar Railways Company that only just been established, with newly appointed CEO and other experienced and professional employees recruited from around the world.
  • Compact size of Doha Capital and the fact that most stadiums are actually located in the Doha will pose lots of challenges in terms of impact by other on-going construction projects, heavy traffic and roads that might be closed to heavy trucks and construction vehicles during morning and lunch peak hours.
  • Integration and coordination challenges as some facilities, utilties, local expertise and logistics (points of entry via roads, seaport and airport) might be lacking.

Construction and Logistics Challenges (Source: Qatar Railways Company)

 Good Luck!

Monday, August 8, 2011

Signs of Strong Growth in Qatar's Construction

I chanced upon this news article below which shared that Qatar's construction industry is set to grow strongly in the first quarter of 2011, based on newly released figures from Qatar's Statistics Authority(QSA).

Signs of the Strong Growth in Qatar's Construction

DUBAI, UAE, August 7, 2011 /PRNewswire/ --

Qatar's construction market is set to continue to grow throughout 2011 - reports new figures from Qatar's Statistics Authority (QSA).

Recently published figures from the authority revealed Qatar's construction market has made steady growth quarter-on-quarter in the first half with the rising from QR5.3bn in the third quarter of 2010 to QR6.1bn in the first quarter of 2011.

The report reveals the construction industry, which slowed across the Middle East in 2008 is now playing a significant role in contributing to Qatar's economic growth - which has surged by 28% in the first quarter of 2011 alone.

The report comes as construction companies, architects and developers across the world eagerly await the announcement of infrastructure projects that will see Qatar's landscape evolve.

Infrastructure projects in-line with Qatar's National Vision 2030 and National Strategy 2011 - 2016 are expected to be announced throughout 2011 and 2012 to build Qatar's landscape in time for the Qatar 2022 FIFA World Cup.

The announcement of Qatar as the hosts of the 2022 World Cup has placed an immoveable deadline on many of Qatar's development projects - with experts revealing that planned infrastructure projects that make up part of Qatar's World Cup bid will need to be ready earlier - in time for a FIFA inspection.
IQPC Divisional Director, Chris Corander says, "It is an exciting time in Qatar at the moment, with many developers, consultants and architects preparing themselves for the tendering of mega projects that will help Qatar to deliver its national strategy. Excellent project management skills and a clear vision will help Qatar realise its World Cup dream in time for 2022.

"The influx of construction companies and the pick-up of infrastructure projects in the region are in-line with QSA's figures, and as the 2022 World Cup moves closer, Qatar's commitment to delivering a successful project will intensify - sparking further growth in the sector."

The QSA report comes as IQPC announces its Qatar Construction Summit and Awards; a four-day event which profiles international case studies on stadium design, construction best practice and infrastructure development ready for the release of Qatar's projects.

Sponsors include Populous, Al Jaber, Hochtief Vicon, OutoKumpu, Drake and Scull, Herzog, Sepam, Apave, Unibeton Ready Mix, Almisned Trading, Almisned Ready Mix, Orimix and Qatar Concrete Ltd.
For more information about the event visit or email or call +971-4-364-2975


Window of Opportunity for Qatar's Construction Industry, "the time is now"

I recently gave a seminar presentation on "Building Materials and Construction Opportunities in Qatar, 2011-2022" to a group of participants at the Singapore's Building and Construction Authority (BCA) on 29 July 2011. The key points I highlighted about the potential of the Qatar's Construction and Building Materials' market as follows:

Key Statistics About Qatar's Rapid Growing Economy and Population

I have distilled three key statistics below that I believed is important to anyone who wants to know why Qatar is one of the richest countries in such a short time.

For further information about Qatar, visit globalEDGE website for Qatar Country Insights and Information.