Chief executive officer MKR Sai tells MEP Middle East that he has received the firm backing of the board to take Towell Construction & Co to “a different level”. It’s this sort of forward-thinking company culture that persuaded Sai to take up the role just over a year ago.
Oman-based Towell is no small fish in the construction market either, securing jobs worth OMR45.5m ($118m) in 2014 and well on course to beat that total this year. Not to mention the fact that it landed the Contractor of the Year Award for the second time at the Construction Week Oman Awards in March.
Sai said the company’s growth has catapulted over the last five years or so, with it now employing roughly 5,000 people.
“We started in 2009/10 taking the big public buildings like airports, supreme courts, industrial projects,” said Sai. “And our MEP division moved from being an in-house centred company to a company that is serious about tendering for contracts with external clients.”
Sai and his team have since been plotting how to take the construction unit including MEP to that different level the board craves. The hours of analysis has crystallised into what is known as Vision 2022, an overarching strategy which aims to turn Towell into an OMR100m ($260m) company in seven years’ time.
Making serious inroads into the MEP sector forms of huge part of hitting that magical one hundred rial figure.
Sai calls it “backward integration”, whereby he sees the current MEP division that was formed in 2012 – Oman Electromechanical Contracting Co (OEMC) – evolving from being fed mainly in-house jobs to competing with the big players within MEP.
The move makes perfect sense for strategist Sai and he is looking to beef up the current MEP offering through a joint venture with an international company.
“MEP takes up 20% of the constructed value so why not take on more of this work? We want to retain business within OEMC by making it self-sufficient to take up the MEP scope of all Towell projects and even work outside Towell with competing contractors,” he said.
“We’ve found that seven times out of 10 the MEP work is awarded to the main contractor in Oman, usually followed by service and maintenance contracts. This is where the backward integration comes in.”
Discussions with potential partners in India and Europe are ongoing and Sai has a clear idea of when he’d like to get something signed on paper.
“Probably by the end of November,” he said. “Towell absolutely has no issues with finance and the teams that we are looking to partner with are big. We have the in-house work to kick-start the new company. Now we want to make it a really big company that can take on somebody like Bahwan Engineering Group or Drake & Scull.”
MEP services were first introduced by Towell Construction in 2008 focused purely on maintenance. The following year this was expanded to include in-house MEP and in 2011 it picked up its first third-party MEP contract: MC4A, the new civil aviation headquarters for Oman’s Ministry of Civil Aviation in Muscat.
The OMR7.2m ($18.7m) deal involved building management system works, fire alarm and fire protection systems, aspirating smoke detector system/lighting dimming control system, UPS, central battery system, chilled water system, AHU, FCU and VAV systems, electrical, IT passive system, HVAC, water supply works and drainage works.
“This was a big statement of intent from us. It showed that we can pick up those big jobs with reputable clients,” said Sai. “We have very much used the project as a springboard.”
The project is indeed high-profile given that it is tied in with the overall expansion of Muscat International Airport. Though the MEP package of the civil aviation building was handed over in December 2014, the overall airport project wasn’t without its problems. Lead consultant COWI-Larsen was kicked off the scheme in December 2012 causing a suspension of work, and Hill International and Golden Triangle were subsequently appointed as supervision consultant and design consultant respectively in 2013.
Meanwhile, Towell had to grapple with an unexpected turn of events when its MEP subcontractor, Australian firm Hastie, went bankrupt. Faced with the prospect of not being able to finish the work, Sai said the decision was taken to absorb the 15 Hastie employees into the Towell MEP division in the third quarter of 2012.
“Yes, it’s a big challenge to absorb staff from another company because you wouldn’t want to start what was essentially a new MEP entity that way with such a big project,” he said. “Thankfully, we were able to make the necessary adjustments and things turned out will in the sense that we didn’t have to wind up the job and give it to someone else.
“That’s where the confidence came from to really push through with MEP. Completing the project under those circumstances showed that we had the capability to deliver MEP on a much bigger scale – hence the desire to make MEP even stronger by teaming with another firm.”
The MEP division followed this up with a villa project, a mixed-use building for Towell Property and Muscat Hills integrated tourism complex (ITC). It was eventually incorporated as OEMC in 2013, kicking off with ITC Saraya Bandar Jissah near Muscat. Awarded by Saraya, the scope of work across three packages includes water supply works, drainage works, LV works, ELV works, irrigation works, external lighting, firefighting and fire alarm works, LPG system works, earth protection works, and air conditioning works for villas.
Sai said that he also hopes to secure a partner firm to form an interior design joint venture, reasoning there is a natural fit in coordinating MEP work with design work.
“It makes life so much easier when you are able to take full control of both facets because a lot of the MEP services will be feeding those areas – rooms, corridors, public spaces etc – where interior design work is going ahead,” he said.
“In 2015 I want to close the deals on the MEP and interior design JVs and have them registered and bidding for work.”