Posted on Sunday 16 October 2011 by Ulster Business

Where in the world?

Following the property market crash, local construction and fit-out companies have increasingly begun to look outside of the island of Ireland for work. Lucy Gollogly asked some of our best known building firms how they manage to compete for work in other parts of the UK, Europe and beyond from a base in Northern Ireland

With the construction sector here still in serious decline, it’s no surprise that Northern Ireland firms are looking overseas for new business.

The local building sector is in fact suffering more than other UK regions, such as London and the South East, where the situation is gradually improving.

And with a similarly bleak picture in the Republic, John Armstrong, managing director of the Construction Employers Federation, says that Northern Ireland firms are shifting their focus in order to stay in business.

“It’s basically the economic downturn that’s driven it and the drying up of public sector spending. I would say a good number of construction companies in Northern Ireland are now looking for work outside the province,” he said.

“Public sector work is scarce on the ground and the great danger is that we’re going to lose the skills base that we need here as skills are in effect exported. So yes, there’s a very clear trend there from companies of all sizes.”

Despite these concerns, Mr Armstrong also believes that firms tendering for work outside the island of Ireland are to be commended.

“They’re being proactive and what’s very clear is that Northern Ireland construction companies build to standards way beyond those that you would get in other parts of the world, including the British Isles, so they have no problem competing,” he said.

“What will happen is things will improve here in due course hopefully, either driven by growth in the economy or as public sector spending gradually gets back to more normal levels in four or five years time.

“Then there will be programmes of work but by that stage most companies will have shifted their workload elsewhere and the skills will probably have gone elsewhere as well.”

Poor trading conditions here led Newry-based MJM Group to look for work overseas – and that strategy has worked to its benefit.

The project management contractor, with divisions in specialist joinery, marine refurbishment and fit-out, has increased its turnover from about £9m to £25m in three years, working for clients include Royal Caribbean, Carnival and Stenaline.

“If you go back five years probably 80% of the work would have been on the island of Ireland, including some of the cruise sector because it would have been with people like Irish Ferries, Stena and even the Irish Navy,” notes managing director Jonathan Guest.

But when the downturn hit, the company moved away from doing business in Ireland almost entirely.

“Because we did have a presence in worldwide markets already we really focused in strategically on going after those markets. We targeted the big cruise companies in the (United) States and some of the large Scandinavian ferry companies operating in the North and Baltic Sea area,” he explains.

Mr Guest believes Northern Ireland companies tend to be very competitive in the international marketplace. But he also warns: “The same rules that you use in the local market don’t apply in the worldwide markets. You need to prove yourself, you need to prove that you have the capability and the financial security to be able to operate and to deliver projects well outside your shores.

“We’re competing with companies from all over Europe, America, the Middle and Far East for a lot of these projects. In the last 12 months we’ve completed projects as far afield as Grand Bahama in the west, through to Germany and Denmark, and right the way out to Singapore.”

The firm’s ambitions don’t end there – a new office has recently opened in the South of France specialising in the fit-out of ‘super yachts’.

With the company’s growth internationally in the last few years, Mr Guest says he doesn’t see it pursuing many opportunities in Ireland any time soon.

“Can I see us doing any shop, office or hotel fit-outs on the island of Ireland in the next three years? I wouldn’t have thought so, he said.”

Fellow construction and fit-out company Mivan has long focused on worldwide markets.

With offices in the UK, Romania, the Middle East, North Africa and the US, past signature projects for the Antrim based business have included Euro Disney in Paris and the Scottish Parliament at Holyrood.

Among numerous other jobs, it is working on a £90m project at the Cairo Festival City site in Egypt, and is also fitting-out the exclusive Bulgari Hotel and Residences in London.

Mivan’s marketing manager Lee Campbell says that when operating overseas it pays for companies to be bullish about their capabilities.

“This is a good opportunity to sell your offering outside Ireland. The London market especially represents a very reachable market. Be brave and confident in your own ability as an individual and as a company, as we have as much right to be operating on the global construction stage as anyone else,” he said.

However, with all markets under stress and competition fierce, Mr Campbell admits clinching new contracts overseas can be arduous.

“Unless you have a partner or strong track record in that specific market, winning work in new markets is a challenge,” he adds.

“One of the key things is research and focus. Research your markets properly and shortlist to three or four maximum. Once you know the potential that these offer, stay focused on these markets and give yourself at least 12 to 18 months before you may see a return or in some cases a tendering opportunity.”

Unlike MJM and Mivan, Northern Ireland and the Republic continue to be important markets for Ballymena’s Patton Group.

Recent stand-out projects have included Belfast Metropolitan College’s new £39m Titanic Quarter campus and the revamp of the Ulster Museum.

However, the company has also increasingly taken on work in Britain, where it has built primary schools in Scotland and fitted out shops including Goldsmiths jewellers and the luxury Wonder Room at Selfridges.

The firm has also dipped its toe into the European market, building Primark stores in the German cities of Bremen and Frankfurt.

“At present approximately 60 per cent of our work is outside Northern Ireland and the Republic, which has increased from 40 per cent over the past number of years. However, the local market is still our priority as we continue to work successfully with our local clients,” comments managing director Neil Patton.

“We’re exploring new opportunities all the time and looking at new markets outside of the UK and Ireland. Mainland Europe is the next natural step for our organisation.”

As for the prospects of business improving here, Mr Patton isn’t too gloomy.

“It will take time, there’s no doubt about that,” he said. However, we are always optimistic about business improving. There are still opportunities locally, especially within the tourism sector and in particular with Derry/Londonderry City of Culture in 2013.”

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