Mohamed Adil Haneef is a confident man. With his firm’s order book exceeding $272m (AED1bn), it is but natural for him to exude this level of confidence. Haneef, who is the chief operating officer (COO) at UAE-based AG Facilities Solutions, along with key members of his team, spoke to fmME on the company’s plans to further grow in the region.
With the acquisition of the soft-services firm Modern Building Maintenance, or popularly known as MBM, in 2018, AG Facilities Solutions, is sweeping away competition and constraints in the FM space.
Although AG Facilities Solutions was formed in 2016, its team comprises experienced people with a quite a few having more than 30 years of FM experience; it should also be noted that MBM is a 40 year-old company. Haneef says that the acquisition has placed AG Facilities Solutions with close to 10,000 employees.
Talking about the intent for acquisition, Haneef reveals: “At the beginning, AG facilities was growing well in hard services, while we were outsourcing soft services. It made sense for us to acquire a company in soft services. We bought MBM, which is close to around 8,000 people. There were a lot of processes which we had to introduce in this new company; a lot of IT-related initiatives had to be implemented. We had synergies between both entities. Through the acquisition, we optimised on operational and support teams by using them in a better way.”
The other advantage from the acquisition, Haneef mentions, is the opportunity to cross sell between AG Facilities Solutions and MBM, which also helped in securing the AED1bn order book. Haneef clarifies that MBM is not just into housekeeping but also involved in landscaping, pest control and façade cleaning.
Besides being in facilities maintenance, AG Facilities Solutions also carries out medium projects and fit-outs. He adds: “When we started executing facilities management/facilities maintenance, we found that there was also a requirement for interior fit-outs and retrofits.” This made the company to dedicate a separate team to execute projects, which fell under its project management division.
Sectors and market
The firm at the moment has managed to cast a wide operational net over the UAE region, right from the Sila border in Abu Dhabi to Fujairah and Ras Al Khaimah. AG Facilities Solutions has also bagged contracts with some of the major clients in various sectors.
Prakul Tewari, business planning manager, elaborates: “In retail, we provide services to Carrefour and Landmark. In oil and gas, we have ADNOC. Under education, we provide hard services to 140 educational facilities of The Ministry of Education in Dubai, Ajman and Umm Al Quwain. In banking, we have some of the big names like ADCB, ADIB, FAB and Citibank. We have our presence with the largest players in the industry. Most of our operations are pan UAE operations.”
“I don’t think any other company would have our reach and skillsets, especially, in servicing the oil and gas sector.”
Talking more about the oil and gas sector, Haneef says: “We have a dedicated team who have been active in the oil and gas industry for quite some time. You don’t get entry into this sector that easily. You need to go through a stringent prequalification process. You need to have the right people, as people are interviewed. During the interview, they check the type of people and the work they have carried out. It’s a mix of safety, quality and technical skills. We took the whole of 2017 to get prequalified.” Haneef admits that in the oil and gas sector the competition is sparse, and entering it made sense.
The firm has also been focusing on healthcare and hospitality. At the moment, it covers Umm Al Quwain hospital and Ministry of Health, but not the private hospitals. Tewari says: “I think hospitals too require a certain skillset. We want to be sure that we have the capability before we start approaching these sectors for work. Last year, most of our bidding has been focused on hospitality and healthcare sectors and I think now it’s delivering results.”
Saleem Athalabbai, head of operations for Dubai and Northern Emirates, and who looks after the FM and MEP maintenance as well as minor project works, explains that for AG Facilities Solutions to capture these sectors, it should have a good base in training, quality, CAFM and system processes. “We have a strong base in training, along with certifications,” Athalabbai says proudly. The firm has been awarded OHSAS 18001 certification for Health and Safety Management Systems, ISO 14001 for Environmental Management Services, and ISO 9001 for Quality Management System.
It is now in the process of acquiring ISO 18295 certification for Customer Care Center and ISO 29990 for Training. Athalabbai adds: “We feel that training is mandatory in any company. If people are being recruited into the Middle East from different parts of the world, they should be trained and be able to adopt to this culture and environment. Our people are our assets. Each individual’s performance will reflect on our image in the market.”
AG Facilities Solutions has a full-fledged a training centre that provides dedicated training for plumbing, electrical, air conditioning, and other relevant specialisations, before its personnel are deployed. After the training, the trainees are placed in a mock room for training, which involves recording with different cameras to monitor their performance.
Of course, providing services to such diverse sectors come with its own set of challenges. Athalabbai recalls that the Ministry of Education (MOE) project was a daunting task as it involved 140 schools, where AG Facilities Solutions had to mobilise over 100 staff. He says: “We had to complete a survey of 140 schools within 60 days from the contract awarded date. In addition, we had to work under time constraints, as we could only go to the schools after 3 pm, when the schools were empty.”
The other challenging project was the soft services assignment from Majid Al-Futtaim (MAF). There the firm had to deploy around 700 people in a period of 45 to 60 days.
Tewari summarises last year as being particularly challenging as a result of the acquisition, integration, process changes and synergies. In addition to that, there were operational challenges of mobilising people as the clients were becoming “quite strict with deadlines”. He says: “What used to be 90 days [to mobilise people], has now become 60 or, even 45 days.”
Another point that Haneef brings to attention is that performance-based contracts are still not popular in the soft-services industry and that it is still a numbers game. He says: “Soft services has not really caught up to the level of hard services when it comes to performance-based contracts. People still want to see a set of cleaners present and doing their job. Unlike in the case of hard services, where, for example, you are not concerned about the number of people maintaining the MEP equipment, and are only interested in the final result or performance.”
Part of the problem why the soft services sector still depends on input-based contracts is the high costs of robotics and artificial intelligence that is used in the FM world. “Cleaning robots are still expensive; however, over a period of time I believe the costs will come down,” says Haneef.
The other broader challenges facing the sector is low margins. Haneef adds: “Margins are always tight. Moreover, there is tough competition, along with strict client requirements, where they have a tight budget. FM is the first place where the client would want to cut costs. FM companies have to therefore relook at their strategy to see how to sustain themselves. I think this has to stop somewhere because you just cannot keep cutting prices every year.”
The other key obstacle is recruitment. “Recruitment and mobilisation has become a challenge over the years. Salaries of people, from where we recruit them, have gone up in their home countries. In addition, getting the right people, training them, and subsequently, retaining them, all this is a challenge because our major expense is manpower,” Haneef adds.
Technology and initiatives
To tackle some of the challenges, AG Facilities Solutions has decided to go big on technology, by developing its own in-house software. Haneef says: “We have been working with different clients from government, semi-government, private, to big asset developers, and most of them have an off-the-shelf software. However, at least 90%-95% of our clients want to use our software for reports. We have five full time programmers working in our office on various projects.
“If one of our clients is having their own software, the first thing we do is integrate the software with ours. We show the client our software capabilities. We provide this as a value-add service. There have been occasions where because of our software capabilities, we have won contracts,” Haneef says.
AG Facilities Solutions’ software is customisable and compatible with all mobile devices running android and iOS. Tewari adds: “You only need to download our app. Our clients, internal staff and vendors use the app. Through this app, we have tried to minimise paperwork. Be it finance team, operations, or procurement, everything is online.
“Technology has been a continuous endeavor for us. We want to now learn how we can use data analytics, and how we can use artificial intelligence for streamlining and improving our services. We want to implement something which is meaningful for us and the client. We plan to hire some fresh minds to help us with data analytics.”
Haneef claims that data has also helped the company in the bidding process. Giving an example, he says: “We recently found out that the highest number of reactive calls is from HVAC, next is from electrical, plumping, carpentry, and so on. When you bid, you can also plan in such a way that you need not allocate a big team on ‘X’ department because number of calls are low. In addition, data can also give you month-wise graph. For example, in July and August, schools are closed, which means we only carry out preventive maintenance. My reactive maintenance team is available. There are cases where I give those clients a cost reduction in July and August, because I don’t need to unnecessarily charge them. This is where data can help us.”
The firm is also aggressively looking at adopting robotics for its cleaning business. Tewari adds: “Cleaning has largely been labour-centric and we want to move away from that by using more robots, especially for high-access façade cleaning. We have already placed orders for a few cleaning robots as well as bots that can clean external glasses.”
Trends and future
For the past few years, sustainability and energy management has been the buzzword, says Haneef. In fact, he says that energy management now is part of the scope. “The client expects us to provide sustainable and energy-efficient solutions.”
The firm itself is planning to install solar panels at two of its several labour camps in the region. “I think we are close to saving around 30-40% energy cost on the camps because of our solar energy initiative,” Haneef says.
The other trend, Tewari notes, is the FM team coming into play at the design and build stage, which can help in long-term planning. He says: “There can be a 10 to 15 year contract, where we can invest along with the asset owner, provided we have that assured longevity in the contract. We’ll then be able to recover the cost over the period of the contract.”
If an FM provider is allowed to come in at the design and build stage a lot of minor errors in construction can be rectified. Athalabbai gives an example: “The toilet or kitchen exhausts are sometimes placed next to the fresh air handling units, and then people complain about bad odour. These are minor things which can be avoided if FM is involved at an early stage.”
The future for AG Facilities Solutions is looking clear. With the resurgence of the oil and gas sector, Tewari says that it has helped in maintaining the company’s margins.
The other advantage for the firm is that the UAE still has a lot of ongoing construction activities. Tewari concludes: “As long as there are new buildings and existing buildings, we will always be in business. Sure, there would be volatility where smaller players come in and try to engage in price wars, but eventually the market is available for us, and clients now are moving away from price-based contracts to quality-based work.”