Big Interview: Nasser Ezz Edin, Commodore MEP
Commodore MEP general manager on forming a new company
Abu Dhabi-based Commodore MEP, part of the Commodore Contracting Group, has been around since the early noughties. The company is run by general manager Nasser Ezz Edin.
From the last financial year to this current one, the MEP contractor has maintained consistent revenue despite operating in a climate of low oil prices, late payments and geo-political unease. Figures released to us by Commodore MEP show that it made revenue of $115.7m (AED425m) in 2015 and is projected to make $122.5m (AED450m) this year, with 75% of the order book already secured.
Ezz Edin says the reason it is on course to top last year’s turnover is partly down to three projects it signed at the beginning of the year: Burjeel Medical City and Al Wafra Residential Development in Abu Dhabi, Noor Al Ahli Hospital in Al Ain and Akoya Oxygen in Dubai by developer Damac.
“If I wanted to just collect projects left and right I could have easily doubled this figure,” Ezz Edin says. “But you have to take projects which have a lower risk profile because project delays and payment delays are a big problem for cash flow.”
Ezz Edin reveals that although Commodore MEP is in a healthy position, plans are afoot to form a standalone sister company called Commodore Middle East, which he will manage.
Commodore Middle East will offer MEP contracting services, but unlike Commodore MEP, will have a separate trading license to Commodore Contracting.
He says forming the company has been a priority of senior management for a while and the move will eventually lead to the absorption of Commodore MEP into Commodore Middle East.
“Before the end of the year Commodore Middle East will be operating,” Ezz Edin says. “Step by step we will move people from Commodore MEP to Commodore Middle East.”
The rationale behind setting up the new company, he says, is that it will have greater access to finance by virtue of having its own license. It will be branded as a specialist MEP contractor in the Middle East.
“This is definitely a step in the right direction looking ahead to the next four or five years – not the short-term,” Ezz Edin says. “Once the geo-political situation starts to settle down, the construction opportunities will start to pick up. So if you have a separate MEP company it will give you better chances to go with all contractors in all countries.
“But we will not delete Commodore MEP, it will be there until it is totally merged with Commodore Middle East.”
He is excited about the prospect of merging Commodore MEP’s portfolio with that of Commodore Middle East’s over the next five years and says there are possibilities to move into new territories such as Africa.
“The Group already has a light steel company in Africa so there are definitely opportunities for us to move into Africa.”
He also says there will be a greater focus on winning work on infrastructure projects because they are “more challenging so face less competition”.
“Not everyone can compete with you on a data centre project, for example,” Ezz Edin says. “Not everyone can compete with you on power stations or pipelines.
“That’s where we are really trying to go and be more active. We already to that type of work but we want to do more of it.”
In Commodore MEP’s second biggest market - Qatar - work activity is rather more benign, Ezz Edin admits.
The company is closing out a university project and two towers all of which will be handed over this year.
“Qatar is still quiet this year but people are much more expectant in 2017 because Qatar will only have five years to get everything ready for the FIFA World Cup 2022,” he says. “The major sector where I’m sure there will be a boom in Qatar is hotels and furnished apartments because they still need a lot more rooms.
“But while things are quiet in Qatar we can move our labour force to other territories where we are busy with work.”
Ezz Edin again emphasises the work opportunities that should arise once geo-political tensions recede, especially in Iraq which is Commodore MEP’s third biggest market after the UAE and Qatar.
“We are all hoping that the crisis in the Middle East will abate,” he says. “We are expecting that if things are settled there will be a lot of reconstruction that needs to be undertaken.”
Ezz Edin also notes that the Group plans to launch an FM company in the near future.
“We are in the process of establishing an FM company. There is already a feasibility study and things are moving very positively towards setting this up,” Ezz Edin says. “We already have the core of this FM company within Commodore MEP where we have a specialised testing, commissioning awnd maintenance department, so the process will be very organic.”