ADIPEC – what’s next after the world’s biggest oil show?

5

Oct

2019

ADIPEC – what’s next after the world’s biggest oil show?

With over 2,200 exhibiting companies within 23 country pavilions, over 1,000 guest speakers and an audience of more than 145,000 there is no question that the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) is now the world’s largest energy event.

Leading figures from the global industry will be in attendance – along with key government dignitaries – over the four-day event from November 11-14: it has highly magnetic qualities, particularly for UK firms looking to diversify into new international markets.

As a delegate of many previous ADIPEC events, I know that the key opportunities often come in the weeks after the conference as opposed to during it. Exhibitors and delegates often come away with renewed drive and determination to explore ways of internationalising their services and products for the Middle East market, but it’s often the case that plans are sidelined once reality sets it.

Although a highly prospective region for energy-focused North Sea firms, it remains a challenging environment in which to do business, both operationally and culturally. It’s critical that companies returning to the UK after visiting ADIPEC don’t try to launch their ventures from afar: history shows that the best results are achieved by having a strong local presence, with boots on the ground.

Indeed, with many decades of experience supporting businesses with international expansion plans, this is one of five key themes that we know cause ventures to either fail or underperform. Others include:

Failure to establish and maintain market connectivity;
Poor local partner selection and relations;
Failure to appoint the right fit management team on the ground; and
Under-estimating the time and costs involved in establishing ventures in the territory and in the region generally.

I cannot stress the importance of putting the time and effort into selecting the right local partner and the right commercial arrangements. Making the right decision at this point can be the difference between success and failure, regardless of how these arrangements are badged: representation, sponsorship, agency, distributorship, licensee, joint venture, collaboration, nominee shareholder or mutual investment vehicle.

The other thing to consider is the entry to market mechanism and whether traditional methods are still relevant. For example, many countries in the Middle East are now placing greater relevance on localisation and in-country value and this is making traditional agency and distributorship models increasingly ineffective and obsolete.

HFI Consulting is pioneering a new collaborative approach to the export market – the Bridgehead Cluster Initiative. This approach is designed to bring synergetic companies together with a pre-identified local partner to enter markets in the Middle East, reducing the costs and associated risks of going it alone.

We are currently consulting with industry on forming three bridgehead clusters for Abu Dhabi. By identifying a suitable local partner, appointing an in-country general manager, and utilising skills and knowledge about local processes, we believe many of the issues surrounding underperformance are addressed.

If you would like to learn more about how this could benefit your own business, please contact us.