Face to Face: Luay Khoury, Projacs International
CW speaks to Luay Khoury, president and CEO of Projacs International
CW speaks to Luay Khoury, president and CEO of Projacs International, number 10 in ENR’s Top 20 non-US project management companies. By Gerhard Hope
When Projacs International opened its latest office in Erbil, Kurdistan a few weeks ago, president and CEO Luay Khoury was there personally to officiate and welcome the new team to the company fold. It is a symbol of the hands-on approach of both the company and its leader.
“Part of our strategy is to go areas where we think there is potential. Erbil is ideal for us because it has a big oil and gas sector. That goes hand-in-hand with our diversification strategy, so we are submitting proposals now and expect to land a project soon.” Khoury adds: “You cannot be a player in the Middle East without being a player in oil and gas.
We have managed to penetrate that market, and now have a core team specialising in providing project management (PM) services for oil and gas companies.”
It has been a long and interesting road for this company, established by Khoury and his founding partners in 1984. “We have grown the business since then, and the business has taken me all over the world,” he says.
This covers the GCC, as well as the US and Canada, hence the name Projacs International (although Khoury says “international” to him simply means conducting any business outside Kuwait). The latest markets on the company’s horizon are Turkey and Malaysia, “where we actually conducted some assignments for clients and are looking to establish a serious presence.”
Khoury says that PM and construction management (CM) were relatively unknown services when Projacs was established. “When we used to go to clients and tell them we do PM services, they used to ask us, are you designers? Are you contractors?
We decided that before we could market our services, we had to educate our clients, and so we arranged a seminar on CM in collaboration with Stanford University and the University of California, Berkely.”
Top speakers were brought in, and the seminar proved to be a sell-out. “We discovered that was a good business model, and that is how our training business started. It has helped us a lot in spreading the word and having direct contact with potential clients and convincing them of the benefits and added value of PM and CM. We have had a lot of attendees, mainly from the government sector, who have since become our clients, and repeat clients as well.”
The venture into training was not simply an aside for the company, but became a crucial part of the business when the financial crisis hit the hardest.
“Training services boomed, because during the crisis, governments were keen in investing in people, and what better way other than training?” At present, Projacs conducts 600 training programmes a year worldwide. “We have trained thousands of engineers and managers, and that business on its own was good enough to keep us afloat.”
In Kuwait, Projacs soon won that country’s first sizeable CM contract, as well as significant work for the Ruler’s Office, for which it entered into a joint venture (JV) with Turner International, giving it its first global exposure, followed by another successful JV with Bovis (now Bovis Landlease) for the Kuwait Petroleum Corporation’s headquarters.
“Those two experiences gave us a jump-start into the business, and since then we have excelled on our own. We still JV with companies on a project-by-project basis, but are now on the shortlist of players in the big leagues. If a client wants to invite international companies, they now approach us as well,” says Khoury.
However, the outlook was far bleaker when Iraq invaded Kuwait in 1990. “We were investigating the possibilities outside Kuwait a little bit before that, but [the invasion] prompted us to pursue it in a more structured manner.”
The first two offices established were in Dubai and in Riyadh. “We had to go through the same growing pains again with different clients, but what helped us was that we had a good business model we could replicate. All we needed was good management to spearhead it.
“Building a company on proper systems and procedures is one thing, but what we have excelled in, is building a proper culture. People like to work for us, whether clients, staff or other stakeholders. That was the vision of the founding partners from day one. We always wanted to be a leading PM company in the Middle East. We come from the Middle East, and that is where our core focus is.
While we practice PM and CM according to international professional standards, we also understand our clients’ culture and needs, and how to deal with them in a way they do understand, rather than just giving them a preset menu.”
This flexibility has been key to the successful growth of the company, with Khoury stressing the importance of ‘unbundled’ PM and CM services. “Rather than a ‘take it or leave it’ approach, we work with clients on small ad hoc services like value engineering, planning and scheduling, project controls and cost estimating. Through this we get to know the project and client better and gain credibility.”
Khoury says a lasting testament to the success of this approach has been the quantity of repeat business it has attracted. “All the clients who have worked with us have taken us along to different projects.
As a matter of fact, several of our clients from Kuwait, who themselves have diversified during the real-estate boom, took us with them, and that is where we started offices like in Egypt, Jordan, Lebanon and North Africa. This has made out entrance into those markets that much easier.”
As much as the company has grown, so too have its clients, especially as they embraced PM and CM. “It was not until the 1990s that Dubai embraced the PM concept, but that was a necessity rather than a luxury due to the size and complexity of the projects and the different stakeholders.
Not only that, they even started to modify it and innovate that procurement process to suit each and every project. You cannot treat a school project like a city project. PM in Dubai therefore became programme or portfolio management, with Dubai leading the market,” says Khoury.
“Later on we saw the same in Qatar, where we were the programme manager at the Khalifa Sport City in Doha for the 2006 Asian Games. We are now looking to be part of the FIFA 2022 World Cup, “and already have some contracts in place for different stadia,” reveals Khoury.
However, he urges caution in Qatar. “It is a market that is in the making, and because of that they are defining different ways of [getting things done] … they are keen on attracting the best international companies … they do have the budget and are spending.
“I guess the expectations by us, the service providers, are so high, and we needed to see it [materialise] so quickly, as we all saw Qatar as a safe haven we could benefit from when Dubai took a back seat over the past two years during the crisis. But it takes time.
That is one of the things we have the luxury of, because while we consider ourselves an international company, we are a local company in each and every country. So in Qatar we are a Qatari company and in UAE we are an Emirati company, and in Kuwait we are a Kuwaiti company.
Looking at Saudi Arabia, Khoury says the Kingdom has the organic growth and population so it “needs anything and everything in terms of infrastructure, from schools to hospitals. We are a major player in Saudi Arabia and have four offices, in Riyadh, Khobar, Jeddah and Madinah.
We expect our business to grow exponentially over the coming few years.” It was not until 2000 that Projacs decided to add ‘international’ to its name, establishing its Bahrain office as its corporate headquarters. It even opened an office in Pakistan, and acquired a 50% stake in US-based Trident Buildings and a 100% stake in Lebanon-based Nassar Engineering Office in Abu Dhabi.
Commenting on the impact of the Arab Spring, Khoury says: “No doubt we have been affected negatively by that, especially in Libya, Egypt and Syria. However, the geographic spread of our offices helped us tremendously, as one country made up for the loss in another.
It is worth mentioning that we did not close any of the offices, and we maintained a presence, even in Syria, where we are still working at the moment. That is part of our commitment to the Arab world and the Middle East.
We are different than any other foreign company that, if there is a risk, they pack up and leave. No, we cannot. That is where we grew up; that is what we are committed to. That is important.”
Projacs has always prided itself on being innovative and progressive, and nowhere is this more evident than it dabbling in IT solutions for the construction industry. “We have developed our own proprietary software that we are not only using for our own projects, but which we have also started packaging and selling to third parties.
Part of our strategy to always keep ahead; we look at recent developments, like the rush on railway projects, so we immediately created alliances and JVs with top international companies, and are now submitting proposals and trying to compete in that market. We are confident that we will win one of these projects one day in any of the Gulf countries.”
Khoury says Projacs is even contemplating the PPP market, as privatisation “is gaining a lot of attention in the Middle East.” Then there are specialised services it offers such as what Khoury terms ‘CM At Risk’.
“That is essentially working as a contractor, but in a CM fashion, while assuming the liability and the risk. We have practiced this successfully on three or four projects where we have a particularly good relationship with the client. Of course, you have to have the resources. We do not have our own labourers, for example, but we manage a group of suppliers and sub-contractors.”
Turning to Dubai, Khoury says Projacs has just secured a major renovation contract at the Burjuman Shopping Centre. “It is a major project and a sophisticated one because, as an existing mall, it will take a lot of coordination and practice. We have done several renovation projects on hotels while they are operating, and that is a challenge.”
Khoury says that while this is the company’s first experience with a renovation project in Dubai, “it is a model I expect to see on other projects pretty soon. We have also embarked on FM and are actually practicing it on a few projects.
We expect this to accelerate in the future because of lifecycle costing. Clients realise they have built these mammoth projects, and not only do they have to maintain them, but they have to increase their lifespan, and that is where you need to apply proper FM techniques and tools, including energy management.”
Despite Qatar and Saudi Arabia being the company’s biggest growth markets at present, Khoury says: “The buck does not stop there. We do not sit on our laurels and say that is it … We have just landed two new projects in Tunisia and Algeria, so North Africa is an important market to us. We have had an office in Casablanca since 2000, and are still working on several hotel and tourist projects.”
Luay Khoury is president/CEO and co-founder of Projacs International, the largest Middle East-based project and construction management company, with a network of 24 offices in the Middle East, North Africa, Asia, Europe and North America.
Projacs commenced operations in Kuwait in 1984, and quickly grew to become the largest Middle East-based project and construction management consulting firm, ranked 10th internationally as per the international ranking by Engineering News Record of the US.
At present, Projacs employs a total staff of over 700 engineers, managers and assistants, who provide professional services on about 100 projects, with a total construction value of about $36bn.
Khoury is in charge of the full management array of corporate planning, development of marketing strategies, HR, administration, finance and operations that cover design and construction management, training, facilities mangement, IT solutions and real-estate development.
Khoury has about 30 years’ senior executive and professional experience in the Middle East and North America, and has been actively involved in a number of prestigious and strategic projects. He is a seasoned lecturer on construction management topics, including contract management, value engineering and project controls.
He holds a BSc. in Civil Engineering from Kuwait University (1982) and an MSc. in Civil Engineering/Construction Management from Georgia Tech, US (1984), in addition to PMP (Project Management Professional) and AVS (Associate Value Specialist) certifications.
Latest developments at Projacs International include the implementation of an Employee Share Option Ownership Programme, which will be introduced at management level but eventually include all employees.
“When we established the company, the vision was to be a leader in the Arab world. After 30 years, we are proud of what we have achieved, and we think we can now hand the baton to the new generation who will lead it for the next century.”