Mohammed Jafer Musthafa was just 26-years-old when he established Daemaar Group. Now he dreams of making Daemaar Group one of the top companies in the Middle East. Construction Business News met the ambitious founder and managing director, and found a young entrepreneur brimming with confidence and excited about the challenges ahead.
Starting out with Daemaar Contracting, a construction company specialising in Civil and MEP, he expanded the company with the acquisition of SPELCO-MEP in 2015. The latest addition to its construction portfolio, MJM contracting, works with leading public and private partners in Sharjah and Dubai. Today, less than five years since its launch in 2013, Daemaar Group has expanded to comprise six stand-alone companies established within the construction (MEP and Civil), Facilities Management, Trading and Retail sectors. Based in the UAE, with offices in Qatar, Kuwait, Oman and Saudi Arabia, Daemaar works throughout the Middle East and beyond.
Daemaar Group was founded just a few years ago. What made you start the company?
A few years ago, right after my graduation, I did a few internships and trainee jobs with different companies before landing a permanent position at a famous oil refinery company in India. Working in various positions under different conditions and different people made me realise that my true passion was to challenge the norms and lead rather than to follow. So I charted a career path, took a job as an engineer in a leading oil company in the UAE and studied the market. Soon after, at the age of 26, I quit my job, invested my life savings and my determination and opened my own company in 2013, which today is proudly known as Daemaar Group.
Daemaar is quite diversified, both in terms of the sectors and the countries it operates in. Why is that?
While on the journey of building a company, one of the most important lessons you can learn is that staying within the comfort zone of your core business can limit the growth of the company and its potential. In today’s continuously innovating and fast moving world, we have access to unlimited resources and fully facilitated technology, which helps to diversify a business to compliment the core sector you operate in. It also helps to push the boundaries and to grow not only horizontally across the region but vertically in the chain as well. Opening the doors to new regions challenges a business and helps to lay stronger foundations for future growth.
What is the company’s main service offering on the construction side? What sort of clients do you mainly work with?
Daemaar group offers Civil, MEP and Facility Management in the construction sector. Our main focus lies in delivering turnkey projects for diverse clients in the fields of property development (commercial & residential properties), multistory hotels, industrial projects and private villas.
What competitive advantage do you offer over other companies operating in the same sectors as you?
Daemaar Group started with its core business in construction before branching out into different sectors. Our excellence in construction stems from our skilled employees who offer their expertise to clients and their projects. One of our key strengths is our valuable reputation in handing over projects on or before the contract date and our excellence in advantage services, such as providing free, two-year maintenance 24/7 to provide 100 percent satisfaction for our clients.
The construction sector in the Middle East has gone through a difficult time in recent years. What are the main challenges you’re facing at the moment?
There are market fluctuations but that is not only limited to the construction sector. The key is to look beyond the present situation and focus on the future because that is every business’ long-term goal. Currently, there is huge potential in terms of recruitment in the market that is being overlooked. Yes, profit margins are being squeezed because competition in this sector is high, but we concentrate on giving the most competitive prices to our clients while increasing our project pipeline. What is notable is how, over the years, banks have become stricter at selecting clients according to their reputation with a Bank Guarantee and Performance bond.
What strategies have you adopted to get through this difficult period?
We are all familiar with the last financial hit in 2008. I believe the market is a cycle and that better times are ahead. Giving unrealistic expectations a backseat and paying attention to everyday routine is very important during this difficult time. Localising your business operations reduces the pressure on a company and the market as well. I consider this period the best time to invest in the most qualified talent available in the market for the future of our company.
Have you seen signs of a recovery recently? You are active in Dubai, for example. Has activity started to pick up again?
Daemaar Group has companies specialised in the Civil & MEP sectors with ongoing projects in Dubai, where the vision is that the future is always under construction. There has been a slowdown in activity but never a complete stop. Dubai is taking this time to focus and invest in smaller developments in the city with road developments, hospitality and tourism projects. The prediction for construction activity in Dubai is for the market to peak again in 2018 as preparations for Expo 2020 accelerate.
Which countries and sectors do you think offer the best opportunities for your business right now?
I started my construction company in the UAE, and one of the best things about this country is that it provides a platform for anybody that wants to grow. The UAE will always have a strong pipeline of projects in the hospitality and tourism sectors which provides opportunities for the construction sector, and this is especially the case as excitement builds in the run up to Expo 2020.
Qatar has established a solid base as an upcoming market with infrastructure project offerings and rising developments, mainly thanks to the fact it will host the FIFA World Cup in 2022. That’s why Daemaar Group has established a base in Qatar, to target commercial projects specialised in the civil and MEP sector.
Saudi Arabia is another strong market with immense resources. Their current focus on the development of energy projects and their VISION 2030 will provide a lot of opportunities for foreign investors to come into the construction field.
Sectors like hospitality, commercial and residential property and the adoption of PPP to finance projects are all examples of how the Middle East is growing and evolving to compete with international markets.
Do you plan to continue expanding the construction side of the company? If so, will this mainly be through acquisitions or by organic growth?
Daemaar Group already has Civil, MEP and Facility Management companies in our construction portfolio. We plan on adding a property development company by 2018, with the intention of building commercial and residential projects around the Middle East. Acquisitions are an easier way of entering established markets and we plan on penetrating mature markets through acquisitions and upcoming markets, like India, by organic growth.
What are your ambitions for the company over the next 10 years?
Daemaar Group was built from the ground up and we dream of spreading our wings and taking the company across borders to new countries around the world with our unique service offerings. The market is continuously changing and companies are now shifting their focus to raising environmental awareness, social sustainability, helping poor countries and raising living standards. With greater power comes bigger responsibilities, and we are now taking small but significant steps to a better future by supporting the government with pressing issues like community development and environmental conservation, because everything is intertwined.
Our strength is our employees and we look forward to growing the Daemaar family and providing flexible job opportunities to people starting from the UAE, with a small focus on my community Pazhayangadi, in southern India. Daemaar Group has ventured into retail with a focus on fashion apparel, F&B concepts and lifestyle brands and trading with construction consumables and food products. In the years to come, Daemaar Group dreams of being one of the top companies in the Middle East.
What advice would you offer to aspiring entrepreneurs from your generation?
We often hear from our parents how life was built on tough experiences, meager resources and a lot of hard work. Hard work has a whole other meaning for our generation. We have access to technology and resources at such a young age. The first and most important step is to understand that power lies in our hands, that we can follow our dreams, chart our own course and build our own future.
My father used to tell me, ‘your youth is for your struggles and doing what you love will only raise you higher in life’. Till today, one of the biggest opportunities I received in the different jobs I worked was the ability to engage with senior employees to learn firsthand from their life and work experiences. Their invaluable lessons helped shape many of the decisions I took for my company, and will continue to do so.