Al Naboodah Construction Group is targeting a 75 per cent increase in turnover to Dh3.5 billion this year, despite a tough start to the year for the region’s property sector.
The Dubai company’s chief executive, Colin Timmons, said he was planning to grow the buildings division of a company best known for civil engineering, and to work on developing closer links between these and other parts of the business, such as its Trans Gulf mechanical, electrical and plumbing (MEP) contracting arm, the Arcon ready-mix concrete business, its specialist joinery operation and the National Plant and Equipment business. He said last year’s turnover was about Dh2bn.
“Getting that overlap [between divisions] is part of our shareholders’ desire … to really try to harness the power of the group, which should give us a more efficient and competitive service offering,” Mr Timmons said. “You might have to suffer a little margin [compression], but it’s good for the group.”
He was recently appointed as chief executive following Steve Lever’s decision to step down after 30 years with the group. Mr Lever is staying on in an advisory capacity, however, and is overseeing its Qatar business, as well as handling some key client accounts.
Mr Timmons said the company was “broadly in line” to meet its turnover target for the year. It won a package to carry out infrastructure works as part of Alec’s recent contract win for a new terminal at Al Maktoum airport, and he said it was “waiting on a few major projects to land”.
“The market is tight at the moment. There is pressure on cash, liquidity is not quite what it used to be. So I think a lot of projects have been tendered and we are aware we are in pole position. That delay of a month or so is difficult to manage, but at least we know it will come.”
The company took control of Trans Gulf in the final quarter last year. Although Trans Gulf has some “testing” projects that need to be closed in Qatar, which Mr Lever was overseeing, Mr Timmons said the business had “no underlying financial issues at all”, and had the full backing of Al Naboodah Group Enterprises, which manages the Saeed and Mohammed Al Naboodah Group’s various businesses.
“All of the projects that they have been working on over the past 12 to 18 months are good, solid projects. I hope to drive them forward as a real asset to the construction group.”
Hamed Madani, the head of consultancy and business intelligence for Aecom Middle East, said that although there were a select group of contractors capable of charging higher prices, many firms were facing pricing pressures as a result of lower material costs and the fact that there are fewer projects around.
Project management consultancy Turner and Townsend’s Middle East director, Mike Collings, said: “There is a tight market out there and we don’t think that is going to change at least for the next 12 months.”