Kiwi firms cash in on Saudi building boom

New Zealand construction consultancy Opus is bidding for multi-million contracts in Saudi Arabia and expects a visit in November to open more doors.

Partially-listed Opus International Consultants, formed out of the old Ministry of Works and Development, employs 2400 architects, engineers and planners in 76 offices in New Zealand, Australia, North America and the United Kingdom.

The company's Sydney-based director of strategy and growth James Phillis says its interest in Saudi Arabia started last year and it is now bidding for nine multi-million dollar contracts, involving some worth hundreds of millions of dollars.

"All of these projects have potential to be worth millions of dollars in fees or tens of millions of dollars of fees.

"We have the potential to create a business for hundreds of people, many hundreds of people, some of whom will be based in the Middle East and some of whom will be based in New Zealand, Mr Phillis told NBR ONLINE.

"The opportunity is significant – but with the emphasis at the moment being on opportunity, not reality.

"There's a lot of work that we still have to do to get to that position, but if we do all the right things and build the right relationships and we deliver, then that sort of potential is there."

Opus is forming a joint venture company with its majority owner, Malaysian-based Opus Group Berhad, which is already consulting with local government in Mecca on an urban regeneration project worth hundreds of thousands of dollars.

Opus has also signed a technical collaboration agreement with Capitas Group International, a subsidiary of the Islamic Development Bank group.

'Worth the hassle'

Mr Phillis says the government's bid to attract foreign investment has not caught up with the bureaucracy.

It takes about six months to form a company, there is a mountain of paperwork to wade through and various licencing and registration restrictions to adhere to, as well as foreign investment fees to pay.

"The opportunities are significant enough that it is worth some of the hassle."

Opus will join up to 30 Kiwi companies attending the Saudi Build trade exhibition in Riyadh in November.

The New Zealand contingent, organised by the New Zealand Middle East Business Council, will also attend a function at the NZ embassy hosted by Foreign Affairs Minister Murray McCully.

The building boom has prompted growing interest in Saudi Arabia, including from Chinese companies.

Awarded construction projects in Saudi Arabia hit an all-time high of $87 billion in 2011.

Saudi Arabia reportedly has more than $120 billion of planned infrastructure projects expected to start by 2016.

New Zealand exports to Saudi Arabia has grown from $474.6 million in 2009 to $691.3 million in 2011 – although in 2008 exports were $730 million.

From Icehouse to the desert

Albany-based firm Bully Boy – which makes automatic retractable bollards and has gone through The Icehouse incubator for start-up businesses – is another considering exports to Saudi Arabia.

Chief executive Dave Wrathall will attend November's trade exhibition.

He says the company, started by father-and-son team David and Charles Broadhurst in 2008, will turn over more than $1 million this year and future growth will come from overseas.

This year it won its first contract beyond Australasia – bollards for a VIP parking area at an Oman shopping centre – sparking interest in the Middle East.

"From what I've read there's a lot of investment in infrastructure and hence that's what we're interested in - airports, car parks, public spaces, even military applications," Mr Wrathall says.

"We'd like to think we've got relationships established in Saudi in the first half of next year and hopefully shipping product in the second half, if not before then."

dwilliams@nbr.co.nz