Irish exports to Arab markets have surpassed all forecasts with the value of goods and services topping €5.3bn in 2015 from a previous high of €4bn in 2014.
With countries and regions such as offering considerable opportunities for Irish businesses, the 2016 Arab-Irish Business Forum will take place at Dublin Castle on April 15 and has been organised for those doing business or looking for new opportunities outside of Ireland.
When the Middle East first opened up a few decades ago, there was the inevitable stampede of large Western companies wanting to do business there. The market has evolved a lot since then. Opportunities in the region have arisen for boutique consultancies and smaller niche companies, which is excellent news for Irish companies.
Miagen’s first customer in the Gulf was Qatargas. At that time, we were a small organisation competing against much bigger companies, yet we won a tender with the world’s largest liquefied natural gas company with an estimated turnover of $60bn (€53.7bn).
Now, difficult economic conditions in the region are compelling companies to seek out deeper insights into their operational performance and profitability. Arab businesspeople are having to face up to new challenges. We are seeing greater demand for scenario planning and models that can cope with the impact of change.
Throughout the Gulf, we’re seeing strong traction for corporate performance management and forecasting and planning models that we design and deliver on the cloud. Arab business leaders have long looked westward for technical expertise and skills, and Irish companies are held in high regard.
What’s more, over years of doing business in the region, I’ve encountered a willingness to look at more innovative solutions.
Combined with a greater focus on the bottom line, this is creating sustained interest in solutions that deliver real value, backed by high-quality service. I believe there are a number of lessons for Irish companies that are serious about doing business in the Gulf.
Lesson one is spending time in the region is essential.
The Arab world can be a challenging place to do business. The business culture in the region is to meet face-to-face, so Irish businesspeople need to travel regularly to establish relationships. The more you commit to the market, the stronger you will build your brand. A serviced office is sufficient at first as you will be visiting their offices. The approach of ‘drop in for a coffee and we’ll talk’ is very commonplace as is a culture of ‘no show’, even if a meeting has been agreed.
Much of our work is now done online through GoToMeeting, reducing the need to travel as often.
Unlike Europe, it is not possible to buy a database of contact names; you have to build that information over time. Previously, you needed to have a local partner or to establish an office in the market, but you can now set up in the airport-free zones — Miagen’s regional office is in Abu Dhabi.
It is now possible to trade directly with a company, or work in tandem with a local agent, so you can find the right business model in the Arab world that works for you.
I strongly recommend contacting Irish companies who are already working there for their insights. There are a number of excellent expat networking groups worth exploring, along with a conversation with your Enterprise Ireland relationship manager.
Lesson two is expect a lot of bargaining.
Our initial meetings with Aramex, a logistics company headquartered in Jordan and listed on the Dubai Stock Exchange, were very intense — almost combative. Arab businesspeople want to see how you’ll perform under pressure. We spent the whole day with Aramex in a charged atmosphere but then over dinner that evening, we were told the deal was ours.
In the early stages of a business relationship in the Gulf, if there is tension in the room during negotiations which appear almost unfriendly, that might be a sign they’re about to close the sale. Conversely, an amicable tone could be a cue that they’re not ready to buy. Anyone looking to do business in Arab countries should also be ready to haggle on price. It’s part of the culture and expected.
Another thing to watch for: when you go to a meeting at first, there could be up to 20 people, when you had expected only two. My advice would be: don’t bluff and bring plenty of business cards.
Irish and Arab cultures are very alike in many ways with similar emphasis on home life, a willingness to diffuse situations with humour and personal promises carry a lot of weight.
Lesson three is be ready if business moves fast.
Our initial contact with Etihad in early 2013 started with three intensive days of meetings so they could assess exactly what we could deliver. By March, they reached a decision for us to build a budgeting model.
By June, we had begun delivering it and phase one was completed by September that year. Etihad is now one of our largest clients, we work with several of their equity partners — Jet Airways, Air Serbia and Air Seychelles — proving the importance of chance engagements and the appropriate response. That first contract came about from an unplanned meeting at a financial conference in London. My contact wanted to find out more about us, so we arranged a call and subsequently a web meeting. He then told me: “My manager says if you’re serious, you’ll be in the Gulf tomorrow.” And I was.
Teddy Murphy is chief executive of corporate performance management consultancy Miagen. He will be speaking at the Arab-Irish Business Forum at Dublin Castle, on April 15.
For more information see www.arabirishbusinessforum.ie