-by John Robinson, Chairman – InterSearch Middle East
The current volatile and cyclical oil price has negatively affected the economic climate throughout the whole of the Middle East, especially in those GCC countries that have significant oil reserves. Capital expenditure has slowed or been delayed, budgets are being reduced and the revenue and subsidy structure of most states is being drastically reorganized.
On the face of it, perhaps not a good time to be expanding your business or acquiring other businesses; too risky. Well, in InterSearch Middle East we are doing just that and we are confident that our business expansion in this current climate is actually less risky now than waiting for a market upturn. We recently opened a new office in Abu Dhabi to complement our offices in Dubai and Muscat, and plans are well advanced for opening another office in Riyadh later this year.
Are we crazy? Maybe, but in our business plan we took account of the following:
- The initial capital expenditure and the built in fixed costs are reduced. Rents are lower, costs are lower and better deals can be made. Given that we are planning on, say, a 10 year horizon then we can build in cost advantages for that period.
- Top quality people are more available. As our competitors downsize or withdraw from the region we are able to attract and hire proven performers to join our expanding and confident business. We recently hired two top performing guys in Muscat and three in Abu Dhabi, all from our direct competitors.
- Our clients appreciate that we are sticking by them in difficult times and we are demonstrating our confidence in them and their market in the clearest possible way, with our cheque book.
- When the market upturn comes InterSearch will be in a much better position to fully take advantage of that, with a well established business already on the ground and a top performing team working closely with our clients.
Crazy? Maybe. Ask me in 5 years.