New year aspirations already in focus after ADIPEC
The start of a new year often signifies a period of new energy: a time when we focus on goals and aspirations for the coming 12 months and map out the journey we need to take in order to reach them.
But for companies that attended Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) that period of reflection and visualisation must start now. ADIPEC 2019 once again showed why it has earned a reputation as the world’s largest energy event.
It comprised thousands of exhibitors and delegates and among them, around 300 UK-based companies across their own stands, local partner stands and the UK and Scottish pavilions, all with aspirations of breaking into or growing in the Middle East.
Unlike OTC and Offshore Europe these days, many of the world’s leading NOC and IOCs exhibited. This wasn’t simply an event for the supply chain to talk amongst themselves: ADIPEC offered real, solid opportunities.
But while those who attended this highly successful event will be riding high on a wave of enthusiasm, the real acid test for them will be where their business is positioned when the doors open on ADIPEC 2020 in terms of sales revenues, profits and positive cashflow - and one does not always lead to the next in the region.
Those serious about entering or continuing to make their mark in the Middle East recognise that success does not happen overnight and success, once achieved, does not roll on automatically in a region where in-country value has become the key watchword and there are just as many challenges as opportunities.
HFI is no different. I met with many companies at ADIPEC that found our document, the Roadmap to Successful Business Ventures in the Middle East, which pulls together the lessons learned over the last two decades, insightful and thought provoking. However, we are now working on the 2020 edition of the Roadmap which will focus on lessons learned in 2019 and look ahead to the new challenges of 2020.
We will revisit key themes: the right business structures and locations; local partner agreements; localisation strategies; management and personnel issues; legal and tax implications; financing and mitigation credit risk; and protecting technology and know-how.
We continue to address the key themes which recur time and time again when understanding why businesses fail or under-perform in the region despite offering products and services which have succeeded elsewhere.
These are failure to gain or maintain market connectivity; failure to understand fully the time and money commitment involved along the road to revenues; local partner problems; ineffective management; inadequate local presence; failure to acknowledge in-country value realities; and issues with credit risks and working capital.
A new consultation exercise was conducted over the summer of 2019 on our Bridgehead Cluster Ventures (BCV) initiative, on this occasion for Abu Dhabi. It was encouraging that most of the companies we consulted were positive and recognised a BCV as a potential pathway through the minefield. We continue to challenge those who were agnostic to come up with the answers to the key challenges we have listed, especially for SMEs with limited resources.
In shaping our own plans for 2020, I am now embarking on a series of post-ADIPEC meetings with clients and connections to ensure that the 2020 Roadmap for Successful Ventures in the Middle East is even sharper and plays a key role in helping our clients to further success.
We are keen to expand the dialogue and if you would like to participate and learn more about how our insights could benefit your own business and your plans, please contact us.