Al-Khodari looks for greater 'openness' in Gulf
Saudi contractor seeks joint ventures and consortia amid expansion
Abdullah Al-Khodari & Sons is looking to project a more open face to the company around the Gulf at the same time that it is targeting the big infrastructure projects, according to its business development manager.
Jim Pollitt told CW this morning that the Saudi contractor’s decision to list on the Tadawul in October, and its upgraded office status in Abu Dhabi, aims to create a greater openness to new clients and joint ventures.
“The capital raising was not through investment but privately through the family,” he explained. “One main reason for the listing was to bring more openness to the company and raise the profile around the GCC. We want to foster an openness that the market can see.”
The company has a specialism in infrastructure works, including rail and roads, and has won a number of contracts in its home market in the last few months. However, its move to be sole partner in its office in the UAE capital, following the change to the rules whereby firms no longer need to be junior partner in a joint venture in a foreign market, was spurred by its desire to be involved in the Union Railway project.
He said the company knew the inevitable obstacle of competing with local companies on medium-sized “bread and butter” projects. However, for the Union Railway development – which aims to connect the emirates and issued two consultancy contracts last month – and similar projects, the company is reaching out.
“Our intention is to enter joint ventures with companies that can provide expertise in areas that we do not have, such as power and water, as well as international consortiums,” he said. “The consultancy contracts for stages 1 and 2 have already been issued. To follow will be the construction stage and we have tendered for that.
“As a Saudi company there will be Abu Dhabi companies that are more knowledgeable, though definitely there is room for expansion, perhaps starting with the Union Railway project.”
Abdullah Al-Khodari is an Eastern Province-based firm dominated by the family of the same name. Its areas of coverage include civil engineering, bridges, roads and airports among others. It has also secured a number of oil and gas related work, and has worked with SRAK, the joint venture between Shell and Saudi Aramco.
It listed in October and its shares rose for much of December, closing down yesterday 2.27% to SAR 53.75 per share.
Pollitt said the company is also targeting the high volume of infrastructure projects in Qatar as the country begins its development and rehabilitation to host the 2022 world cup, but ruled out making acquisitions.
“In Qatar we can’t compete on bread and butter stuff; we have to look at the bigger picture. I don’t believe the local market in Qatar will be able to handle the volume of work needed for the world cup, so we would be interested in acting with local and international partners."