It has been an eventful few weeks for contractors in the Gulf, and in particular for two engineering giants in the region. But is the evolution of Saudi Binladin Group (SBG) and BIC Contracting (BICC) a teaching moment for their regional peers, or is it a sign of things to come?
I would like to think the contractors’ respective journeys were both educational and augury. For instance, Saudi Arabian giant SBG’s current state should be reviewed for the lessons it offers about financial judgment and business diversification. SBG’s 537 business units are expected to be “rationalised” in the next few months, which could include them “being sold off, wound down, or merged”.
According to a report by Reuters, a new holding company could also be formed as part of the restructuring exercise. SBG business units outside the scope of the rationalisation activity will be placed under the new entity.
“Among the units expected to remain under the new holding company will be a contractor that will retain the Saudi Binladin name, as well as [its] operational maintenance, real estate, energy, and advanced technology and business investments,” a source told Reuters.
While additional details about the restructuring programme are yet to be revealed, it appears that its aim is to ensure SBG – which holds some of the kingdom’s largest construction contracts – emerges as a stronger contractor following the exercise.
As any good contractor will agree, identifying your strengths and weaknesses is essential in order to be competitive in your market. UAE-based BICC – formerly known as HLG Contracting – is making efforts in this direction. Earlier this month, the outfit said its new name signified its “ongoing strength and commitment in building and infrastructure construction across the Middle East”.
A company statement to announce the rebranding did not explain the significance or origins of the name BICC, but chief executive officer (CEO) and managing director, Moustafa Fahour OAM, said the new name stood for the firm’s “core strength” and would offer it a “refreshed focus”. Regardless, the development is a significant one for the company, which witnessed high-profile shareholding changes in 2016, and also recorded major contract wins in the same period, such as Dubai’s Gate Avenue at Dubai International Financial Centre and Uptown Dubai by Dubai Multi Commodities Centre.
It is likely that, as a result of these recent changes, both SBG and BICC will capitalise on market opportunities with a renewed focus in the months to come. Indeed, as group CEO of Arabtec Holding, Hamish Tyrwhitt, said last week, “focusing on your core competencies, whether that is a geographic market or […] a sector”, must be prioritised in order to ensure an organisation’s steady, long-term growth.
Contracting leaders in the Middle East should strive to master similar self-awareness while making decisions about their business.