CN visited the Lion City and spoke to three UK construction firms to find out how they gained a foothold in one of the richest, most relentless and most saturated markets in the world.
“The village is a lot smaller in Singapore,” says Cundall Singapore director Marcus Eckersley. “If there is a request for proposal out, it will come to me by nine o’clock in the morning.
“By 10 o’clock, I’ll know who the other bidders are.”
If you are a construction firm operating in Singapore, you’ll find that everyone knows everyone – which is unsurprising considering you can walk from one end of the city to the other in under a day.
But a smaller neighbourhood does not necessarily mean winning work is easy – far from it. Reputation and brand are essential for clients, but even the biggest household names may find it challenging to get a foothold in one of the world’s most lucrative financial hubs.
So what does it take to win work and is there space in this highly competitive market for British construction firms to take centre stage?
Back to square one
“The best way into Singapore is to travel with a client,” Mr Eckersley says. “It really is a matter of starting from square one.”
Cundall entered the Singaporean market in 2010, when one of the company’s clients brought them over to the city to work on a project. This provided a vital platform from which the company could leverage further work from other customers.
Marcus Eckersley Singapore director Cundall
But according to Mr Eckersley, contracts didn’t just simply fall into the firm’s lap. “You have to go round knocking on doors and getting somebody into a position where they want to give you a job,” he says. “People will say, ‘Why should we give you a job if you haven’t done any work in Singapore?’”
If you don’t travel with a client you may get the cold shoulder – but UK firms can also elbow their way into this market by buying a local construction company.
ISG had a similar journey to Cundall when it set up a division of the business in Singapore around 17 years ago. The company was brought over by office space provider Regus to deliver a 30,000 sq ft scheme – a significant project for a new entrant.
It was essential to deliver this project successfully, according to the company’s Asia group managing director Gary Allin, in order to secure further work with other clients. The group invested heavily in the scheme and picked its supply chain carefully, building up a profile of potential supply chain partners and interviewing them before setting up its offices.
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Some of the contractors ISG employed on its very first project continue to work alongside the firm today. “Our preferred joinery contractor and dry wall contractor have grown their business with us,” Mr Allin says. “And although we don’t own them, about 90 per cent of their income comes from work with ISG.”
He agrees that the biggest barrier to entry into Singapore as a foreign contractor is securing a customer base – but brand is everything if firms are to overcome this. “For ISG, we leveraged our global brand when we moved over here,” Mr Allin explains. “We were willing to risk our brand strength on our delivery capability in Singapore.”
“We came over here and thought, ‘We have a great pedigree in London’. However, people will ask, ‘What have you done in Singapore?’”
Andy Marr, 8Build
He adds that customers and procurement officers acting on behalf of a client will always look at your track record of working in the region. “You will have to think of other things to offer to get over this if you are new,” he says.
So what happens if you are a new company travelling without a client and without a global brand to fall back on? British fit-out and construction contractor 8Build has first-hand experience of what this path looks like.
In 2005, eight senior managers from ISG left the company to set up their own firm. Five years later, that firm spotted opportunities in the Singaporean market.
One of the eight directors, Andy Marr, took the plunge to set up 8Build on the other side of the globe. With just a laptop in his hand and business cards in his pocket, he recalls the challenges of securing work and proving the company’s capabilities in a saturated market.
“We came over here and thought, ‘We have a great pedigree in London and we can showcase these projects over here’,” he says. “However, people will ask, ‘What have you done in Singapore?’ It’s a chicken and egg scenario.”
Gessi Singapore 8Build 2
He took whatever projects came 8Build’s way. “Initially when we first got here, we were scratching to climb up the ladder,” Mr Marr says. “We had to prove ourselves. Now we’re in a position where clients will prefer us to deliver a job and a lot of our work is repeat business.”
The company has made a name for itself as an expert in food and beverage fit-outs – which has opened doors for scooping work in other sectors. “One job leads to another, and before we knew it, we became the food and beverage experts.” Mr Marr says. “From that, we got hospitality and retail opportunities, and from that office work came along – which was a breath of fresh air.”
Keeping your friends close
Disrupting this market can be a tough gig. So what does it take to win – and keep winning – work in Singapore?
“The market is strong and there is plenty of opportunity,” according to Mr Allin. “But it’s not open. The client may have preferences for who they want to deliver the job – and usually around three to five companies will be invited to tender.”
”Sometimes the challenge is that the client is already talking to someone and a decision has been made as to who will win – usually the relationship is already there”
Marcus Eckersley, Cundall
Once you see a tender, you will have a pretty good idea of whether it presents a real opportunity – or whether a client is merely ticking a box to show compliance by offering a procurement process.
“When you see a list of three to four people you know who will be going for the job,” Mr Eckersley says. “But details in tenders can be quite poor and will generally be lifted from one job to another. Sometimes the challenge is that the client is already talking to someone and a decision has already been made as to who will win the job – usually the relationship is already there.”
From looking at the tender, the trick is to figure out whether it is worth bidding for the job if a preferred firm is on the list, according to Mr Eckersley – which makes building relationships with customers essential.
But it’s not only clients with whom contractors need to maintain close ties. “Relationships with your competitors are important in order to know who your competition is,” Mr Marr says. “It’s a small world over here.”
Mr Allin agrees that knowing your competition is crucial – and a good way of keeping informed on upcoming opportunities. “Customers know us, the consultant community knows us, so we’re relatively well informed when it comes to knowing what is coming up in the market,” he says.
Gary Allin Asia group managing director ISG
This environment has helped generate greater industry collaboration, according to Mr Allin. “There seems to be more early engagement between customers and contractors. We’ll also have workshops on how we can work together more, with designers, consultants and clients sitting round the table.”
Once you’ve won a job, how does delivering a project compare to one on home soil? “It’s pretty much the same in Singapore as it is in the UK,” Mr Marr says. “But the timescales are crazy. A typical tender period will last for a week to 10 days… then you get on site super quickly.”
When you’re on a job, work won’t stop, according to Mr Marr. “It’s a 24-hour construction period when working over here,” he says. “It never sleeps, activity goes on all through the night.”
He says the challenge is to ensure quality is not compromised on such squeezed programmes.
Barriers and opportunities
Travel down the four-lane highway into the city and it won’t be surprising to see a lorry carrying construction workers to work in wooden trailers.
According to Mr Eckersley, health and safety is “pretty poor” in this part of the world and nowhere near standards set in the UK. “You could walk around a construction site and there will be workers who aren’t wearing helmets and people standing on boxes instead of using a ladder,” he says. “With health and safety, many people improvise.”
“Quality can be difficult to achieve. We’ve had some really bad contractors who have had to be seen off the site”
Marcus Eckersley, Cundall
He recalls one example of severe health and safety negligence. “You’re not supposed to drink on site – but when I was on site, I saw a water station where workers could leave a bottle of water,” he says. “One worker decided to fill up a water bottle with turps [turpentine]. If that water bottle made its way back to the water station accidentally, someone could have drank that.”
He says regular site visits are needed to ensure standards are being maintained. Things are improving, however, according to Mr Allin, who says the rest of Asia is following suit as it improves health and safety guidelines.
Another problem arises when trying to source skilled labour. “Quality can be difficult to achieve,” Mr Eckersley says. “We’ve had some really bad contractors who have had to be seen off the site.”
Singapore also suffers from the same image issue that UK construction faces. Getting Singaporeans to work in the sector is challenging, Mr Marr admits, as most prefer to work in the large corporate banks and law firms clustered in the city centre.
Further barriers can crop up when attempting to bring talent over from the UK, especially if you are an engineering firm. It is a protected trade, Mr Eckersley explains, which means you will need a minimum of one registered engineer from Singapore in order to start your business. “You can’t just turn up here, even if you’re chartered and an engineer,” he says. “You need to find engineers here – or go back to university in Singapore.”
“There are a lot of international companies that consider Hong Kong as a good platform to enter the market in China”
Andy Marr, 8Build
If you’re a consultant, you will also need to pay SGD500,000 (£278,918) to get on a government-approved panel in order to be considered for public sector work, according to Mr Eckersley.
Considering the Singaporean government’s ambitious growth plan, this is important in order to be considered for big schemes. The government aims to double the city’s rail network under its 2013 Land Transport Master Plan, adding 360 km of new line by 2030.
Plans for the future
So what are Cundall, ISG and 8Build’s future plans in the city state?
Cundall is setting its sights on expanding its team. By Christmas this year the business will comprise 16 permanent staff; in the next four to five years, this is expected to rise to 28 people.
ISG has 82 members of staff and says it is always looking for more talent. The contractor also has its eye on tapping into the lucrative hospitality sector – a market to watch, according to Mr Allin. “Primarily, the work we have is in the offices sector. We are doing hospitality – but not to the scale we would like to. We’re looking at this very seriously, as we’ve only just scratched the surface.”
This sector is seeing a boom at the moment as tourist numbers are rising year on year. In addition, hotel rooms are increasingly being used as alternative work places.
ISG The Diamond Louis Vuitton Singapore 1
With regards to retail, Mr Allin says Singapore is experiencing a slowdown– which seems to be a global trend. However, he anticipates the sector will bounce back in Singapore. “Everyone loves to shop here,” he says. “We delivered the Louis Vuitton diamond building and there’s a report that another significant retailer is going to do something similar – which is one to watch.”
And for 8Build, the market in nearby China represents a fresh target. This year, the company set up another office in Hong Kong and has already carried out consultancy work off the back of projects it has successfully delivered in London. “There are a lot of international companies that consider Hong Kong as a good platform to enter the market in China,” Mr Marr says. “It is safe and transparent. A lot of the banks and law firms we work for here have offices there too.”
He says the group has been approached to enter the neighbouring Malaysian market in Kuala Lumpar. It is now experiencing success after a difficult start – but has the struggle been worth it?
“It’s probably aged me quite a lot!” Mr Marr jokes. “But I’ve found it more rewarding setting up business here instead of in the UK.
“I can look back on this when I’m older and think, ‘We’ve created something from nothing over the other side of the world’ – and I’m proud of that.”