Middle East growth gathers pace

Top agencies set up shop in region but experienced firms warn of tough task ahead.

FD and Finsbury are set to become the latest financial comms firms to expand in the Middle East, but established players have warned UK agencies that the region is no easy option.

FD, already established in the region, is to open a third Middle East office in Doha, the capital of Qatar. The new office is expected to be led by vice-president Hugh Barker, who joined the firm in October from Pelham PR.

'Qatar is an important market and as we are already in Bahrain and Dubai, this is a natural progression for us,' said John Hobday, managing director of FD Gulf.

FD joins Citigate Dewe Rogerson in opening a new office in Qatar this year, while multi-service agencies such as Hill & Knowlton, Bell Pottinger and Weber Shandwick also have a presence in the emirate.

Finsbury does not currently have a base in the Gulf, but is likely to recruit in Dubai to help service its newly won financial media relations brief with the country.

The agency was selected from a pitch-list thought to include Bell Pottinger, FD and M: Communications.

'Dubai is not doing as badly as some media coverage suggests,' said James Murgatroyd, managing partner at Finsbury. 'The Dubai authorities want to see a sense of perspective in the media.'

A number of industry observers noted that Finsbury could find it tough to increase openness and transparency. The government of Dubai is also said to be a particularly demanding client.

Dubai has been hit by huge falls in property prices - as much as 70 per cent, according to some agents. As a result new business opportunities are increasingly occurring elsewhere in the region. Gavin Anderson has recently opened offices in Saudi Arabia and a host of firms are active in Abu Dhabi.

But agencies with a long-term presence in the region warn against UK-centric firms simply exporting London personnel and business models to the Middle East.

'Those agencies jumping on the bandwagon will quickly find things won't work,' said FD's Hobday. 'It takes a long time to build a business here. Local knowledge and experience is essential.'

Richard Constant, president and CEO of Kreab Gavin Anderson, said: 'We have a business in the region where we employ a very strong cadre of local talent. A number of firms going there to compete now are going to find it is a great learning process.'

HOW I SEE IT

Richard Campbell, MD, Capital MS&L

If there is a lot of business in a particular region, it is natural that agencies will follow the business there. But any agencies looking to catch the moment in places such as Doha still have to go there with a long-term attitude.

The Middle East remains a difficult market in which to make money. Agencies will not be able to charge the same prices they typically do in the UK and it is expensive to recruit and relocate people from abroad. Successful operations need economies of scale - an agency only picking up a handful of clients in the region will struggle. It is not a rosy economy for new entrants.

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