Canadian companies are riding a desert wave in Dubai, taking advantage of "mind-blowing" development in the United Arab Emirates (UAE).

The UAE is in the midst of a construction boom, with more than $100 billion in projects under way or slated to begin over the next few years in Dubai alone. In 2000, Canadian exports to the country were valued at $208 million. In 2005, that number had grown to $586 million.

Michael Denman is among those cashing in on the boom.

His company, Crystal Fountains, of Concord just north of Toronto, has created more than 1,000 dramatic water features in more than 30 different countries across six continents, but nowhere are the company's award-winning fountains more in demand than the city of Dubai in the UAE.

Illustration courtesy of Crystal Fountains
Burj Dubai, the world's tallest tower, is set to open in Dubai in 2008. Canadian firm Crystal Fountains will play a role.

"Water features are popular in the Middle East because of the heat, obviously," says Denman. "But water is very important in the history and culture of the Arabian Peninsula. It's like jewelry, it's very ostentatious."

Crystal Fountains expanded into the Middle East and Asia in the early 1990s in response to the recession that affected North America at the time. The company's expertise soon won it loyal customers in the UAE cities of Abu Dhabi and Dubai.

"North America still represents 70 per cent of our company turnover, but Dubai, the city, represents 10 per cent of our overseas activity," says Denman.

There are many projects competing for contractors such as Crystal Fountains in Dubai's hot market. The city is rife with construction megaprojects, including a new city for 750,000 people, a new airport with the capacity of Chicago's O'Hare and London's Heathrow combined, a $27-billion tourist complex, and the $4.5-billion theme park Dubailand.

"There are many projects under way and planned, utilizing the financial resources from the UAE's significant oil reserves, a welcoming legal and social environment, and its geographic position in between the Mideast and South Asia," says Richard Mann, director general of the Canada-Arab Business Council.

The rate of development is "mind-blowing," says Denman. "I've been in this business for over 15 years, and I've seen things happening throughout the world. Even China's growth pales to what's happening here."

The UAE's economy is backed by its oil and gas reserves, estimated at 97.8 billion barrels, or 14 per cent of the estimated reserves of the Middle East.

There are many opportunities for energy companies, big and small.

"We set up six months ago, working off the knowledge base of a group of us who worked in the Middle East for years," says Sandra LeBlanc, vice-president of corporate development for Burj Petroleum.

The company is based in Dubai; and has offices in Abu Dhabi, Calgary, Beijing and London; and has Canadians among the ranks of its senior executives.

Ryan Harrison, for Business Edge
Contruction cranes illustrate the building boom that Dubai, United Arab Emirates, is currently experiencing.

"The core of the UAE's reserves is Abu Dhabi, with major companies who have been there for many years, and will continue to be there. What we're looking at are areas where there are smaller fields that may not be as economically attractive to the major companies."

Burj Petroleum and Crystal Fountains are part of Canada's small but growing share of foreign investment in the UAE. But LeBlanc warns that taking advantage of the growing opportunities requires hard work and patience.

"Working in the Middle East is not like walking next door and saying: 'Hey, I'd like to drill for oil,' " says LeBlanc. "You've got to show that you're serious about doing it, and this is especially true for new companies. The business ethics of the Arab world favour long-term commitment. They want to work with people they can trust, who are not there for a quick turnaround. You've got to build relationships."

Dubai is a challenging place to do business. There's the climate, for one thing.

"About 90 per cent of the water features we do are outdoors," says Denman. "The heat generates huge evaporative loss. It's also a windy area, which produces overspray; and then there is the sand.

"We are fortunate that electricity, manual labour and water are cheap. Sea water is used because it's readily available, but the salt corrodes the pipes and just about anything else. All of this means that water features require regular maintenance by qualified personnel, and fortunately people understand that this is something you have to pay for."

Then there are legal and cultural distinctions, not to mention the problems of distance.

"As with any export market, Canadian firms must become familiar with local methods, the legal environment, and establish personal relationships, which are the key to business in the region," says Mann. "Dubai is 11 hours ahead of Calgary, so phone conversations are not sufficient - you must be there."

Denman says: "The Emirates' weekends complicate business. The official weekend in the UAE is Thursday and Friday, giving Western companies just a three-day window of business communication.

"Fortunately, language is not a barrier," he adds. "English is the language of business, contracts, drawings and documentation.

"That said, (citizens of) the Emirate represent a small percentage of the population in Dubai; consultants arrive from all over, including Europe, India and other Arab countries. As a result, one of the challenges we face is the transfer of knowledge and finding qualified people. You have to work hard on training, and make sure that everything is well documented."

The challenge of training was an opportunity for the Southern Alberta Institute of Technology (SAIT), which has opened a branch in the UAE. SAIT, founded in 1916 as Canada's first technical college, now has more than 2,000 faculty and offers corporate training to up to 55,000 students worldwide each year.

"We grew with the oil and gas industry in Alberta, and thus we have a heavy focus on energy education," says Ian Cowan, director of international business at SAIT. "With the developments in the Middle East, a number of countries sought to increase participation from the local workforce. There was a need to give these individuals the skills required to work in the industry, and we served that need.

"We started in Abu Dhabi a couple of years ago, teaming up with MKM Holdings. We had SAIT National Polytechnic ME registered in the Middle East earlier this year, but we were training students before that.

"We've worked throughout the Middle East, except for Iraq, for years, and we operate around the world, so there were no major adjustments to make to work in the UAE," he adds.

"We're used to working across time zones. We're used to transporting people long distances for training, whether they're students or instructors. We're used to working in different cultures. It's just a matter of patience and understanding," says Cowan.

Of course, the spectacular growth seen in Dubai and other cities in the United Arab Emirates may lead some to wonder how long it will continue, but Canadians like Mann are optimistic.

"Canadian firms are active in almost every sector," says Mann, "from processed food products, education, transportation, high tech and communication, engineering, architecture and project management, to energy production transportation and processing."

LeBlanc says: "You have an enormous networking ability in Dubai. With all the activity and its access to the rest of the world, you meet and work with people with connections across North America, across the Middle East, into Kazakhstan and Russia, everywhere. People are very open to sharing information as well, and that's important in evaluating your own opportunities.

"People settle there because of that," she adds. "There are good schools, hospitals and so on; it's a great lifestyle and you have a lovely network of associates to work with, and that's very valuable."

Crystal Fountains is working on projects connected to Burj Dubai, which will be the world's tallest tower when it opens in 2008 (no connection to Burj Petroleum). "It's one and a half times the size of the London Docklands at one go," says Denman. "It's the most high-profile project in the world at the moment.

"There are dynamic leaders bringing the economy forward," he adds. "The country is shifting to a Friday/Saturday weekend, which will give us a four-day window of business communication. Because there's such high demand, finding high-quality workers in Dubai can be a challenge, but there are young, well-educated people coming up who are working more and more to the western model of management."

"SAIT has a 25-year joint venture planned with the UAE," says Cowan. "So, we're there for the long term. And that has an impact with the people of the UAE, who see that we're committed and willing to build a relationship. That has led to new opportunities, not only in the Emirates, but also in the neighbouring countries like Oman, Kuwait, Qatar and Saudi Arabia.

"The UAE is an example of modernization and technological advancement over a short period of time," he adds. "As an institute of technology, we're very pleased to be co-operating with them in bringing that venture forward."

Web Watch:
www.canada-arabbusiness.org
www.crystalfountains.com
www.sait.ab.ca

(James Bow can be reached at bow@businessedge.ca)