True grit – the path to ACC’s success in the Middle East
ACC discusses modular construction, project pipeline, and adapting to the region’s changing marketplace with CW
For more than 50 years, Arabian Construction Company (ACC) has commanded itself as one of the top contractors in the region with a portfolio comprising some of the Middle East’s most iconic developments including the Sheikh Zayed Grand Mosque and Etihad Towers in Abu Dhabi.
While the majority of construction firms have faced many obstacles, such as the COVID-19 pandemic and recessions, for decades, ACC’s secret for overcoming these challenges is to navigate a “conservative approach”.
Speaking exclusively to Construction Week, ACC’s director Rasheed Mikati, said: “It’s obviously a challenging period not only for the region but on a global scale. Throughout ACC’s 53-year history, we have witnessed many recessions; and our conservative approach has helped us navigate through every one of them.”
Expanding on how the business is responding to COVID-19, ACC has implemented several measures across its sites to help relieve pressures for the firm.
“Across our Africa, Middle East and India operations, we have seen increased operating difficulties during the coronavirus outbreak associated with travel restrictions on staff, reduced supply of materials and more onerous self-imposed workplace practices.”
He adds: “ACC has instituted new measures to help workers stay physically distant. These include practices like splitting shifts, staggering breaks and creating separate walkways for workers. We have had to source more buses to ensure that distancing is maintained during travel and opened up more space for storage and laydown areas offsite to permit round the clock delivery.”
Mikati expands that the firm’s short term focus is to deliver its ongoing projects by making the necessary changes needed to maintain a healthy business while protecting its employees.
“We believe the interests of our customers and our projects are best served by working together with all project stakeholders to identify the greatest risks and coordinate our efforts to prevent or mitigate any impacts that may arise,” Mikati explains.
“Naturally, forward-thinking companies focusing on self-preservation will scale back their operations in anticipation of decreased backlog over the coming months. Though it may mean fewer profits in the short term, it helps businesses adapt to an ongoing recession in the future.”
In terms of its project pipeline, ACC revealed that they have delivered “extremely large projects” throughout the Middle East and North Africa recently, as well as being awarded a new contract to extend one of the largest children’s cancer hospitals in the world.
“In the UAE, we delivered the megaprojects of Address Sky View and Address Fountain Views for Emaar and the iconic new Mashreq Bank HQ,” says Mikati.
“In Egypt, ACC have been heavily involved in renovating and restoring historic buildings such as the Mena House, Old Cataract Hotel and the Nile Ritz Carlton. We have also recently been awarded a new contract to build an extension to the Children’s Cancer Hospital, a project ACC originally completed and is one of the largest children’s cancer hospitals in the world.”
ACC also elaborated on expanding further into the “promising and growing” market of Saudi Arabia, but Mikati insisted that the firm must remain “careful” to ensure their track record is not compromised by putting too much on their plate.
“It’s [Saudi Arabia] a massive market and has its own unique challenges. The supply chain is stretched, and many contractors have hurt their operations there by growing too quickly,” says Mikati.
“ACC has secured, delivered or is currently constructing high-profile projects between Riyadh, Jeddah, Makkah and the Southern Regions, including recently handing over the twin tower Hilton Hotel in Makkah and is on schedule to deliver more than 2,500 housing units for the Ministry of Interior.”
The contractor also revealed to Construction Week that it is in discussions to set up a joint facility in Saudi Arabia with a leading European modular contractor as modular construction becomes “more pronounced” for future developments.
“What we feel the local market is currently lacking are high quality volumetric producers who can produce fully integrated modules suitable for residential, hospitals and hotels,” explains Mikati.
“With the advent of the COVID-19 pandemic, the need for offsite modular has obviously become more pronounced for future developments.
“However, this poses a challenge for the logistics of importing such modules that would have been greatly impacted with recent worldwide border closures and supply chain disruptions. They need to be based here.
“At the moment, we are in discussions with a leading European modular contractor to set up a joint facility in Saudi Arabia to fill this gap.”
Looking towards the future of the business and the industry, ACC said it remains committed to its long term visions of sustainable growth and quality project acquisitions, but admitted the longer the crisis continues, the more economic impact it will have.
“We have had to make necessary changes in the short term to adapt to the new reality.
“There is a sense of upheaval that comes from many arenas: how to keep employees safe, whether local jurisdictions will shut down jobsites, potential supply chain delays and government actions to respond to the crisis.”
He concludes: “ACC’s senior management team is working to stay on top of the rapidly changing situation within the region in order to ensure that employees and clients are satisfied.”