Paul L’Heureux, CEO of Crystal, a world leading water feature designer and parts manufacturer has been working globally for over 30 years. Here, he draws on his experience and discusses the issues architects, manufacturers and consultants should be aware of when working in foreign markets.
For western architects, manufacturers and construction consultants, working abroad, particularly in emerging markets, has become increasingly important in recent decades. Rapid economic growth in Asia, Africa and the Middle East has led to a construction boom, offering western practices the chance to expand at a rate that’s almost impossible in their own well-developed markets.
The long term trend in these emerging economies continues to point upwards and there are still many opportunities for those willing to take them. However, there are significant factors that should be considered when entering these countries for the first time, or when targeting long term projects. In my experience, awareness of the following points are key.
Negotiating Payment / Protecting Against Risk
Always ensure that any contract you take on is solid enough for a western banking facility to underwrite. Be careful with open terms, and try to arrange terms of settlement such as 30 days, although you shouldn’t expect this to be effective in all countries. If you haven’t worked with the client before, or if you have concerns, demand a significant proportion of your fee upfront.
Most western countries have organisations designed to help exporters, and should be made full use of. In Canada we have Export Development Canada (EDC) which can provide insurance that covers up to 90% of losses on outstanding invoices. It also advises on checking out new customers, political risk insurance, and provides relevant networking opportunities - all services that can be invaluable.
If you’re looking for similar organisations in your country embassies, industry
associations and chambers of commerce are a good place to start. These will usually have specific initiatives relating to the country or region you are targeting.
Dealing with Political Risk and Conflict
Firstly, although it may seem peculiar, risky countries tend to have the highest growth rates, and therefore the most potential work. Before writing them off, ask how risky they really are. The media often paints a more dramatic picture than the reality. The best way to make a decision regarding almost anything in a foreign market is to speak to trusted, experienced contacts operating there. If you don’t have these contacts build them up by networking.
However, if you are working in a country and an unstable situation occurs be quick to act. Crystal was working on Cairo Festival City, a 3m sq m mixed use urban community project in Egypt when the Arab Spring erupted. We were quick to ensure the safety of our employees and put them in hotels well away from the protests.
We were very careful about travelling around, and only made journeys in approved taxis. We also wanted our employees to feel safe, and three of them came home until the situation died down. Ultimately whether an employee stays or not is their choice - insisting they remain somewhere they perceive as dangerous probably won’t help your business in the long run.
But importantly, we didn’t panic, and went on to complete the project this year despite many changes in Egypt’s political landscape. The Middle East has had political stability issues for the last half century or longer, yet international business has always continued in the region regardless of the risks.
Locals People and Expats
Clearly respect local people’s culture and remember you are in their country. Often they have different business motivations and it’s imperative that you understand them.
Until recently, many locals in emerging markets presumed westerners had broader expertise. This has changed as their economies have continued to develop, and you can now expect to be questioned just as much as you would be anywhere else. Also, there is much more architectural/construction services competition from local firms than there used to be.
Working with expats from a similar country can be a welcome comfort. However, you can’t assume that everyone is always working with the same sense of urgency that you are. For some, a delayed building project ensures they don’t uproot their family, lose an attractive lifestyle or a tax-free salary. So ensure everything is moving at the pace it should be, and watch out for people making unnecessary excuses.
Bidding for work
In the Middle East and Africa don’t set your expectations too high. It usually takes a long time to complete deals, and many will never materialise. Do not put all your eggs in one basket and be patient - you can probably expect to win around 25% of the jobs you go for, or leads you perceive to be ‘live’.
In the overwhelming majority of cases foreign firms will not win legal disputes in developing countries’ judiciary systems, even with a strong case. Instead of taking legal action it’s usually best to cut your losses and move on. However, every country is different so it is worth checking your options. Following British rule many of the Gulf States have upheld a legal system where fairness prevails - for example, Crystal won a legal dispute in the United Arab Emirates relatively recently.
In short, do not be afraid of working in foreign markets. They offer great opportunities for those prepared to put in the necessary focus and planning. And remember that the advice of those who have been there and done it is probably the most invaluable resource of all.
CRYSTAL is a world leading water feature designer and manufacturer of premium quality water feature products helping global designers, specifiers and installers achieve success for 45+ years. With offices in North America, Europe and the Middle East, Crystal is a resource for new ideas, new products and new ways to create and engineer safe and innovative water, light and fire features. To date, Crystal has completed thousands of water feature projects around the world attracting a multitude of awards and other honors.
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