Construction

Gulf contractor ALEC’s five-year plan to double business

October 18, 2023, 4:08 AM

ALEC construction One Za'abeel — ALEC's existing projects include One Za'abeel in the centre of Dubai, offering retail, office and residential space

Projects include UAE’s first casino
Focusing on Riyadh
Aiming for 15% annual growth

ALEC Engineering and Contracting, the company behind some of the Gulf’s biggest projects, is looking to double its business in the next five years, with Saudi Arabia making up a core part of its plans.

Developments already under their management include the UAE’s first casino and Saudi Arabia’s entertainment city.

Barry Lewis, ALEC’s recently appointed CEO, told AGBI that the kingdom would be a focus for the construction contractor, which is part of the Investment Corporation of Dubai, the emirate’s sovereign wealth fund.

“There’s no doubt that Saudi has got an incredible amount of projects that are on offer,” he said.

Saudi Arabia is set to invest more than $175 billion annually on industrial and mega projects between 2025 and 2028, according to a report from global consultants McKinsey & Co.

It is estimated that spending will reach a peak of $180 billion in 2026 and 2027, the report said. Nearly $1.3 trillion worth of projects, including the $500 billion Neom and the Red Sea resorts, are in progress.

Focus on Riyadh

Lewis said that the capital Riyadh was their main focus, in particular the giga-projects at Qiddiya and Diriyah Gate, as well as Mohammed Bin Salman Nonprofit City, also known as Misk City.

Misk City aims to contribute to the goals of the Mohammed bin Salman Foundation “in supporting innovation, entrepreneurship and qualifying future leaders”.

“Our sweet spot is to have five or six projects running simultaneously,” Lewis said.

Last week, Saudi Arabia’s Qiddiya Investment Company, the authority behind the reported $8 billion Qiddiya entertainment resort, awarded a joint venture involving El Seif Engineering Contracting and ALEC the contract to build the infrastructure near its Speed Park racetrack.

Lewis said the deal was valued at SAR7 billion ($1.9 billion).

A SAR2.8 billion contract was granted to the same joint venture in 2022 to build Saudi Arabia’s first water theme park at Qiddiya.

Closer to home, ALEC was recently given the green light to build the new Wynn Resort in Ras Al Khaimah.

The multi-billion-dollar integrated development on Marjan Island will house a 1,000-room hotel, a high-end shopping mall, a meeting and convention facility, spa, more than 10 restaurants and lounges, as well as a gaming area and other amenities.

The UAE’s construction market size is expected to grow by more than 3 percent a year between 2024 and 2027, according to the latest Mena Construction Intelligence report from JLL.

This will be fuelled by increased investment in the infrastructure and real estate sectors, including residential, hospitality, mixed-use and commercial real estate.

Targeting growth

ALEC employs 23,900 people, 5,900 of whom are in-office personnel. It has been responsible for a range of developments across the UAE, including Dubai International Airport, the Natural History Museum in Abu Dhabi, One Za’abeel, Dubai Hills Mall and the Madinat Jumeirah Resort.

The company’s work on hand is at a record level of more than AED20 billion.

Lewis said to reach the five-year target they need to achieve year-on-year growth of between 15 and 18 percent. This year, ALEC is on track to exceed annual revenue growth of 25 percent.

“We’ve a fairly healthy order book,” Lewis said. “But we’re also very mindful of our own capability and capacity.”

He added that they would continue to have a strong focus on the oil and gas sector, which makes up one-third of ALEC’s turnover.

Lewis was appointed CEO earlier this month, taking over from Kez Taylor, who has moved into an advisory position on the board as a non-executive director.