Abu Dhabi, UAESaturday 25 January 2020

SME profile: Tribe Infrastructure helps small agricultural business get off the ground

The country imports about 85 per cent of its foodstuff needs, according to government statistics.
Peter McCreanor, Tribe Infrastructure chief executive, says ramping up agricultural production in the UAE couldn’t be more urgent. Ravindranath K / The National
Peter McCreanor, Tribe Infrastructure chief executive, says ramping up agricultural production in the UAE couldn’t be more urgent. Ravindranath K / The National

Peter McCreanor’s Tribe Infrastructure is helping to turn the desert green by financing a small to medium enterprise hoping to make the country more self-sufficient through growing cucumbers and tomatoes in greenhouses.

After working as an engineer in his native Australia, Mr McCreanor went on to become an investment banker at Macquarie Capital in Abu Dhabi in 2006. Then in 2011, like many small business owners, the 47-year-old called it a day as an employee when he saw a gap in the market that wasn’t being supported. He realised that good ideas, such as hydroponic projects, could not get off the ground because they lacked the technical and financial help they needed.

“I was frustrated,” he said. “I could see that we could do these infrastructure projects that didn’t require a lot of investment banking skills; if [the companies] could understand the investment banking part that came with it, they could put together a broader service.”

Such infrastructure SMEs rarely get the time of day from banks, said Mr McCreanor, especially now when cash is tight because of low oil prices.

But ramping up agricultural production in the UAE is needed. The country imports about 85 per cent of its foodstuff needs, according to government statistics. The yearly current cost of importing food is about US$100 billion and is set to rise more than four-fold to over $400bn by 2025 as the population grows, according to the Ministry of Economy.

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The first stage of the hydroponics business Mr McCreanor’s company helped secure international financial backers for, is being built on a 40,000 square metre plot in Ras Al Khaimah. It will mostly produce vegetables as well as fruits like tomatoes.

The project will eventually stretch across 100,000 sq metres; the first leg will be fully operational by the end of the fourth quarter this year.

While the businessman declined to divulge the financials of his client’s project, he said setting up his own business required an initial outlay of $400,000 to $500,000, which he financed himself.

Helping other small businesses, however, is a small part of Mr McCreanor’s company. The bulk of Tribe’s revenue comes from advising bigger corporations, such as real estate companies and utility companies.

Mr McCreanor said 90 per cent of the company’s revenues come from the UAE, but Tribe is expanding into the wider Arabian Gulf, Asia and Australia even as infrastructure projects in the region slow down.

As companies in the region reduce headcounts, they need to hire advisory firms on a short-term basis. Moreover, many of these companies such as real estate entities had overstretched themselves while oil prices were high and are now looking to divest the utility side of their businesses, creating opportunities for advisers like Tribe, he said.

Mr McCreanor said the company focuses on projects of up to $500 million in size, smaller businesses that can rarely afford the expertise of global banks.

“We get work because the accounting firms struggle to get the technical aspect of what we are doing. The investment banks are too expensive and we’ve found a niche because we marry the technical with financial acumen.”

But going it alone has not been plain sailing. The firm launched in Ras Al Khaimah free zone, where for a Dh20,000 fee the entrepreneur shared an office.

Last year, however, the company, which now has a staff of six, moved to Abu Dhabi’s nascent financial hub, the Abu Dhabi Global Market, a move the businessman said has given his firm a new cachet.

“The stamp it puts on your business if you are registered in a place like the Abu Dhabi Global Market is very different,” he said, “where you have a proper office and people can come and visit you in it.”

mkassem@thenational.ae

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Updated: March 4, 2017 04:00 AM

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