Gulf Construction Online - AlBawani expects revenue to rise to $7.2bn

Saudi Focus

Eng Alshawaf ... considering an IPO.

AlBawani expects revenue to rise to $7.2bn

01 December 2023

AlBawani Holding Company, a diversified Saudi conglomerate, registered a growth of 39 per cent last year, and anticipates its revenue to increase to SR27 billion ($7.20 billion) by 2027, Eng Fakher Alshawaf, Chairman and Group Chief Executive of the company, has said.

The group, which was established in 1991, currently operates in several sectors including construction, specialised contracting, water and power, facility management, manufacturing, MEP solutions, technology, and investment in public-private partnerships (PPPs).

As part of its growth plans, Eng Alshawaf said the group has adopted a wise expansion strategy covering energy and mining, in addition to increasing investment in assets which will be offered through state funds, governmental and private projects.

AlBawani’s board of directors is also considering selling a stake in the company through an initial public offering (IPO) in the coming period, he told CNBC Arabia in an interview.

“Driven by a steadfast commitment to fostering sustainable growth, AlBawani Holding Group is actively considering an initial public offering (IPO) to make a portion of its shares available for public subscription in the near future. We are open to any strategic initiative that can further enhance the group’s value and propel its growth trajectory. As a leading national enterprise, AlBawani Holding Group is determined to play a pivotal role across diverse sectors and establish itself as a formidable competitor for global players,” he elaborated.

“Since its inception, AlBawani Holding Group has navigated a course through significant challenges, and has emerged as a firmly established entity – a testament to its unwavering determination, unflinching dedication, and tireless efforts. Moreover, the steadfast support of the Saudi government has been instrumental in empowering national companies to assume pivotal roles, thanks to the launch of numerous infrastructure projects and legislative reforms,” stated Eng Alshawaf in the interview on CNBC’s Arabic Channel.

Eng Alshawaf emphasised the transformative impact of Saudi Vision 2030 in propelling the kingdom to a prominent global position. He underscored AlBawani Holding Group’s commitment to aligning its strategies with the successive short- and long-term growth plans outlined in the vision. This proactive approach has enabled the group to successfully execute a multitude of large-scale projects across the kingdom, he stated.

Partnership with PIF

Eng Alshawaf remarked that partnering with the Public Investment Fund (PIF) represents a unique opportunity for the group to leverage the Fund’s vast expertise and the opportunities it presents, enabling the company to elevate itself into a pioneering diversified conglomerate within the region, consistently delivering exceptional services and value to clients, employees, and the society at large.

He also highlighted the PIF’s crucial role in the construction sector, considering its paramount importance to the Saudi economy. He added that the Fund’s investments will play a pivotal role in the realisation of Vision 2030 and its ambitious projects.

Construction’s key role

Eng Alshawaf emphasised the significant role of the construction sector in the evolving dynamics of the Saudi economy, which is currently undergoing significant diversification and robust growth. He pointed out that the challenges now faced by the sector stem primarily from the sheer scale and diversity of projects being undertaken. These projects can only be successfully executed by companies that possess the necessary expertise, planning skills, preparedness, and effective leadership to navigate the complexities and deliver exceptional results, he stressed.

Through its construction division AlBawani Construction Company (ABCC), AlBawani has consistently demonstrated its ability to compete effectively and carry out large-scale projects, ensuring that the delivery of these projects meets the highest quality standards and is carried out cost efficiently, he added.

Mega projects

In terms of the key ongoing development projects in the kingdom, a majority of them are centered around real estate, he said. These include initiatives led by the Ministry of Housing and its affiliated companies, as well as other significant developments like Neom, The Red Sea Project, and Qiddiya, and those being spearheaded by Seven and other developers across the kingdom.

The Saudi market holds immense promise and is poised to attract a plethora of construction and investment projects offered by the state. These projects are marked by their diversity as exemplified by Neom, where AlBawani has successfully executed one of the most significant projects. These large-scale initiatives spann various domains and position the kingdom as an attractive destination, he elaborated. AlBawani’s involvement in these projects is multifaceted through its various divisions.

In the investment sector, the group holds significant assets in partnership with the government sector, such as the operation of the 600,000-cu-m Jubail III water treatment plant in collaboration with other Saudi investors, Eng Alshawaf stated.

“Furthermore, we have embarked on the first educational infrastructure project in conjunction with the Ministry of Finance, the National Center for Privatization (NCP), and Tatweer Buildings Company (TBC).

The first phase of this project has already been completed in Jeddah, with assets affiliated with the educational buildings in Makkah set to be delivered by the year-end. We intend to enter into several long-term ownership agreements, extending up to 22 years, with various agencies, and in coordination and collaboration with various AlBawani group companies,” he added.

Health sector

Regarding AlBawani’s involvement in health sector projects, Eng Alshawaf noted that the government has shown a strong commitment to advancing the health sector. He pointed out that with the privatisation of this sector, it is poised to attract substantial investments from both domestic and international sources. AlBawani, primarily through its ABCC subsidiary, has successfully completed numerous projects in this realm. He emphasised that AlBawani is among the leading specialised companies in this field and is a pioneer in implementing medical projects worldwide.

Lucid factory

As for AlBawani’s role in establishing the Lucid factory, one of the largest electric vehicles (EV) production facilities outside of the US, Eng Alshawaf said the first phase of the factory, which was inaugurated on September 27, 2023, was built by AlBawani in record time.

AlBawani began construction of the first phase of the facility in May 2022. This and future phases are expected to consist of many buildings across Lucid’s 1.3-million-sq-m campus plot at the King Abdullah Economic City (KAEC).

Nationalisation of jobs

In reply to a question on the nationalisation of jobs, he said AlBawani Holding Group has established the National Construction Academy (NCA), a non-profit national training

institute, which has already commenced its mission by training 500 students. The plan is to increase this number to 1,000 students in the upcoming session. He emphasised AlBawani’s commitment to nurturing well-qualified, domestic talent capable of contributing to the construction sector.

Eng. Alshawaf also revealed the group’s ambitious plans, undertaken in collaboration with a technical institute, to expand the scope of training and introduce new specialisations that can cater to the needs of the construction and contracting industry.