Before we begin to talk about the importance of having an advisory firm assist you with a capital-intensive infrastructure project, we need to understand what capital-intensive means.
“Capital-intensive” means any business processes or industries that require a huge amount of capital investment to manufacture and produce any goods or services. To produce goods and services to such a large extent, companies need to own a high number of fixed assets in the form of land, machinery, tools, and equipment. Such industries are mostly marked as industries with high depreciation.
When such high investment and stakes are involved in such capital-intensive projects, you must hire an advisory firm before getting into a deal. Green Urbane is one of the leading infrastructure consulting firms in Dubai and the UAE. Let us see in this article how hiring an advisory firm will help you in your capital-intensive or private-public partnership project.
Fundraising Goes Smoothly
If you are one of those firms that need to have a fund-raising round for one of your upcoming projects, then by hiring an infrastructure advisory firm in the UAE, you will increase your chances for a smoother and better deal.
Many investment firms and investors exercise caution before entering into such a high-value capital deal. When you hire professional experts such as Green Urbane for your deal, these professionals ensure that your deal goes as smoothly as it can for you. They also ensure transparency between you and the prospective investor. Green Urbane has an almost 80% success ratio for its clients for fundraising, which is why we are considered one of the best fundraising consulting firms in Dubai.
Helps You Prioritizes, Align and Execute
Whether you are an investor or a company that is looking for an investor, an advisor helps you set your priorities and work on them
When your goals and priorities aren’t clear as a firm, chances are you will end up ruining your investments and getting into trouble. That is why it is a benchmark rule to set priorities and define them properly before you begin working on any high commercial value and capital-intensive project.
The next crucial step that comes after setting your priorities straight is aligning them and getting them executed. In the absence of an infrastructure advisory consultant in Dubai, you will end up with a set of well-defined goals and priorities only on paper. A goal that isn’t implemented and made real is equal to having no goal at all. What will work best and what will not work well? What additional human resources or technology is to be implemented? These are some of the aspects your advisory team will help you with.
Helps You Increase Your Returns
When you hire project finance and infrastructure advisory in the UAE, they help you with re-evaluating your portfolio to help you with increasing your profit margins.
In 2013, for example, green urbane advised one of its investors to liquidate his investments in a steel manufacturing plant and reinvest them in a service-intensive industry such as elevator manufacturing, auto component manufacturing, and marine engineering.
Some of the core capital-intensive industries, like cement, steel, and others, have seen a sharp decline in recent years in terms of profits. As an advisory firm, it is our foremost priority to look for your profits. Profit margins can always be raised by managing your portfolio well. We must analyze industry norms regularly and exit or enter the right industry at the right time. Leading companies and big names have become successful in their projects by hiring agencies that are experienced with PPP infrastructure financing in the UAE.
Helps You with Smooth Mergers and Acquisition
As we discussed above, to increase profit margins, we must take the exit and enter new business spaces at the right times. This can be done by strategically getting into mergers and acquisitions.
Green Urbane has been a leading advisory firm for many public-private partnerships (PPP) for infrastructure development. Even when a firm tries to get into a PPP, it is a type of merger or acquisition. To ensure that both the companies involved in such deals are at a winning end, an advisory firm helps you to a great extent. The advisory firm that you will hire will ensure that the background checks are done. As much as background checks are necessary, it is also important to take a sneak peek into the internal operation, to find out potential mal-practices or other such hidden issues. The advisory firm will give you the go-ahead only after going through all the rigorous checks.
Helps You Build Lowest Cost Position
Your advisor’s key role will be to show you positions where costs can be reduced. Any business that continuously revisits its cost models succeeds in reducing its manufacturing costs and increasing profits.
French tire manufacturer Michelin started a manufacturing unit in Serbia. The decision was made after their project finance and infrastructure advisory in Dubai suggested that they take advantage of Serbia’s geographical location. With cheap land and labor in Serbia, Michelin was able to build a manufacturing unit that could produce twice as many tires. By revisiting the geographic footprint, Michelin managed to get double production at lower costs. Michelin managed to save their capital by selling one of its facilities that weren’t crucial for its needs but were located in a prime region of the city. This is yet another suggestion given by their advisory firm.
Concluding Lines
To help you with investing in the proper direction, whether you are planning to get into a merger acquisition or a public-private partnership, having an advisory firm back you with data empowers you to take firm decisions.
Capital-intensive projects are of large scale and have many stakes involved that directly determine good or bad for a very large group of people. It is better to be double sure rather than be sorry later. Thus, hiring capital-intensive advisors matters a lot for such projects.