Face to Face: John Helou, Al Nasr Contracting
Firm attributes strong track record to its conservative approach
The CEO of Abu Dhabi-based infrastructure contractor Al Nasr attributes its strong track record to a conservative approach to the marketplace. By Michael Fahy.
The chief executive of Abu Dhabi-based Al Nasr Contracting, John Helou, says that his company has had an unbroken record of growth for both revenues and employee numbers throughout its 40-year history.
In terms of headline numbers, turnover has dipped from its peak of $245m (AED900m) in 2009 to just over $190m (AED700m) in 2012, but Helou argues that the amount of work being carried out is greater than ever.
“This was purely due to the fact that we’ve had lots of jobs where we were subcontractors for installation only - without the material, but the jobs were bigger,” he said. “For instance, if you look at the resources, we are employing more people.”
Helou said that the company employed 3,500 in 2008 and 3,800 in 2009. This has continued to climb to its current level, where it employs 4,500 people.
“Hopefully, this year we will grow bigger again,” Helou said. “At no stage have we had to downsize. This you can relate to the proper planning and the conservative approach towards the market.”
Al Nasr began life as a firm carrying out small-scale irrigation and landscaping projects for villas.
It was founded by chairman Sami Sadawi who set the company up with a local partner, and the shareholdings have remained the same since, with Sidawi owning a 49% stake and the local partner retaining 51%.
Sidawi witnessed the launch of lots of new major projects in the Emirate, and the pair decided to invest to diversify into infrastructure works including networks, sewerage, pumping stations and related works.
The company had been known as Al Nasr Irrigation & Contracting, but had to change its name around 10 years ago because Helou said that it had begun to be seen as “a drawback”.
“We started taking big transmission lines and pumping stations - huge jobs, a few hundreds of millions of dirhams - and whenever you'd go into the kick-off meeting you'd have someone from the client side say 'Guys, can you do this job?'.”
It has since diversified into embarking on landmark civil engineering and commercial building jobs, as well as building desalination plants and major utilities networks.
For instance, it has built both phases of Emirates Steel’s huge facility in Abu Dhabi and the Emirates Float Glass factory. Helou cites a number of other landmark jobs – such as a contract to supply, install and commission an 88km network of pipeworks and a pumping station to a palace for HH Sheikh Khalifa bin Zayed al Nahyan in the Western Region.
The company was given an 88-day target to complete the network by Abu Dhabi Distribution Co and managed it in 86 days.
It also worked with Taisei Construction of Japan to build the first twin 1600mm-diameter pipeline in the UAE for ADWEA. The ductile iron pipeline was around 400km in length.
Other key projects have included the installation of a labour village for 35,000 workers on the Yas Island development for Aldar Properties and a $54.5m (AED200m) contract with Nexans to install 400kV duct cables in Dubai.
“The job was an extreme challenge. You're doing a very deep excavation and deep micro-tunneling within the city of Dubai - in Al Rigga St and Al Barsha St and some of the most congested streets of Dubai. We successfully completed it on time in June 2011.”
The firm also completed a $136m (AED500m) contract as part of a joint venture with Fibrex to deliver infrastructure, roadworks and all other support services for Manazel Real Estate for its huge Al Reef villas project containing more than 2,500 properties near Al Raha beach in Abu Dhabi.
“It was a three-year job and it was completed on time with great awards and accreditation certificates. The final phase completed in the first quarter of 2012. It was quite an iconic job.”
Helou said that the ever-larger nature of some of the infrastructure works and the growth of its civils projects are the reason the company moved “to a different level”.
“Prior to these jobs, the civil division in the company was just a support function for the main activity of the company, which was MEP. Now it’s a section that does high rise towers, commercial towers and civil projects and one of the latest iconic jobs we have just finished, which is the Khalifa port.”
Al Nasr Contracting carried out infrastructure works at the port and for many of the support buildings in the nearby Khalifa Port Industrial Zone (KPIZ) for main contractor Habtoor Leighton.
“The job consisted of more than 100km of different kinds of piping to be finished in a period of eight months. We completed on time and the opening of the port was done on time. We got awards from ADPC for substantial completion.”
He argues that the firm has also developed a niche for carrying out challenging work – much of which is done at short notice.
“This is where your expertise… where your experience in the country over the past 39 years is of added value. This is also where your competition is less, because you're doing something that not everybody can do.
“The more the difficulty is, there more the margin is. It's all about risk.”
He said the company tends not to worry about the amount of money required to complete a job satisfactorily.
“The approach of the owner and the board is 'don't worry about money - worry about the job'. We worry about having the money prior to having the job.
“Once the job is awarded then we worry about how to get it done on time and to the satisfaction and quality standards set by clients. Do your job properly and you will be properly compensated.”
The firm takes on challenging jobs with confidence, he argues, because it keeps control of so much of the process itself. The company tends not to use subcontractors unless work requires a particularly niche set of skills that it does not possess in-house.
“Basically, we’re an A-Z contractor. We do everything,” Helou said. “When we take a job, we chip it down and it is all being done in-house.
“This, we believe, has so much added value in terms of pricing and for timing and quality of deliverables.
“A subcontractor is going to put his mark-up on a project and you are going to put your mark-up on top of this. We eliminate this step.”
Helou believes that the next phase of Abu Dhabi’s economic cycle is either just about to start or will begin soon – citing recent budget commitments by the government for major infrastructure projects across the Emirates as well as iconic jobs such as the development of Abu Dhabi International Airport and the Louvre and Sheikh Zayed museums set to start in Abu Dhabi.
As an infrastructure specialist, Al Nasr expects to be involved from the outset.
“We are gearing up for the next cycle. We believe we will be able to take a big piece of the cake by deploying our expertise and our added value. We do believe that the market is looking positive.”
Indeed, the company is also pushing into new geographical markets, having opened an office at Erbil in Kurdistan three months ago as well as planning a new opening in Qatar.
Helou said that the market in Kurdistan “looks promising”.
“There is more said than done, but it certainly looks promising. I would say that it feels like the UAE 30 years ago."
Similarly, it has kept a watching brief on Qatar for many years, but believes that with so much work planned for completion by 2020 contracts will need to be awarded relatively soon.
“We believe it’s the right time to be in Qatar. Bus as you know, being in a new country without the right business partner I believe is almost a waste of time. This is the challenge for our business development team – to find the right partner.”
This cautious approach to growth is something which has been a trademark through the years. It has no debts or outstanding loans and a “remarkable” focus both on capital and on cash management, according to Helou.
“That’s why all through the tough times we never faced any financial burden – the company was always as healthy as it can be.”
Its current project backlog for 2013 stands at $185m (AED680m).
“We believe we have a very good start where we are today. We’re still very early on in the year. One thing that is guaranteed is that our full manpower is secure for 2013.”
- 4,500 Al Nasr employees
- $190m Turnover in 2012
- 400km Ductile iron pipe laid for ADWEA
- $134m Infrastructure & support, Al Reef villas