Project Qatar: Interview, Arabian MEP

Vasanth Kumar explains how his firm is helping Qatar's building sector

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Mechanical plant room at The Pearl Tower
Mechanical plant room at The Pearl Tower
The Pearl Tower
The Pearl Tower
Vasanth Kumar, CEO, Arabian MEP Contracting
Vasanth Kumar, CEO, Arabian MEP Contracting

The World Cup win and Qatar’s 2030 Vision means the country has become one of the most attractive construction markets in the world, with firms from all over the world keen to claim a share of the work.

One company which can’t be accused of arriving late to the party is Arabian MEP Contracting, which is part of the Al Malki Group. The company has been part of the Qatari landscape since 1997, when it introduced its air conditioning expertise that it had established in Bahrain.

However, the company was fast to expand its offering, Vasanth Kumar, CEO, tells Project Qatar. “We quickly realised that the market here in Doha was completely different to where we had come from,” he says.

“The main contractors here want a complete MEP provider as a sub-contractor. What we were doing was supplying the air conditioning, but sub-contracting out the electrical element, so we could not guarantee the quality, and when we looked closely we felt that what the companies were suing were not up to the mark – we realised that we needed to start on our own.

“So we added drainage, plumbing, electrical, fire fighting, so we had the range of MEP services. The transition took place from 1997 to 2003, when we became were a fully fledged MEP contractor.

"We then realised that the country we were working in was too small, and added maintenance and manufacturing operations.

"At first though, we found some problems as the local suppliers may not have stocks of metals for example, or the after-sales service was not as we would like, so again we decided to do it ourselves. We had the same problems with manufacturing, so invested in our own facilities.

“All of these capabilities complement each other and we have increased the group turnover by three times since we took this decision.”

Arabian MEP has worked on some exciting projects in Qatar since then, cementing its position as one of the top MEP contractors in the region – a position borne out by its Grade A rating. It has worked across the commercial, industrial and infrastructure, providing its service to tower and office developments, stadiums and sport complexes, hospitals, hotels, schools and shopping malls.

Notably, the company recently provided its MEP services at the new arrival terminal of the Doha International Airport, Hamad Bin Khalifa Medical City and Kahramaa substations.

But asked to reflect on his favourite projects, Kumar says the company’s philosophy remains unchanged on each and every contract. “We have completed more than 600 projects over the last 16 years, and every one is the same whether it is for 1m riyals or 100m riyals. The reason I say that is that being a local company, if you want to continue here, you must maintain your reputation, you cannot duck and run.

"We have to take all our project execution seriously and make sure we are proud of the end result.”

It is a philosophy that has held the company in good stead, with around half of its contracts coming from repeat business.

“As well as the quality of our work, our clients know that they can approach us at any time, they can pick up the phone and get through to me or my chairman, while our maintenance operations are open around the clock.

"That gives people a sense of comfort and is a major reason why we attract repeat business. Over the last 16 years, we’ve never left a job unfinished, despite some very challenging issues. I think that by working on and maintaining relationships, most issues can be resolved.”

It is a sentiment which is very true of Qatar, where there is a real importance placed on close relationships, with the emphasis on the personal touch often the basis for a business decision. In the same way, firms can often fall by the wayside in Qatar because of the small nature of the country, with word travelling fast.

“We believe in the importance of developing those relationships,” Kumar comments. “It is a small country and we have to work within this limited space, we know what is good in terms of clients. Once we approach them and register an interest, if a client is interested we can sit down and agree on things.

“The local Qatar culture is quite different from the rest of the region; people always like to reach people who are at the highest level and they don’t want any difficulty in doing so. They want an answer within in a day and if you are unable to do that it can be taken as an office, meaning you lose out on business. I make sure that I always answer calls and we make it a practice to meet with our clients regularly, not for a progress meeting, but just on a casual basis. These things matter here.”

Having gained a significant foothold in the Qatar market – and with the country embarking on momentous building programme – Kumar is now keen for Arabian MEP to broaden its horizons and take part in some of the country’s most important construction projects. The company has established a joint venture with Samsung C&T, and has also linked up with a Turkish firm which specilaises in sporting stadia.

Explaining his vision to take the company forward, Kumar says: “We broadly classify the market into four parts: residential, commercial, industrial and infrastructure, and we are not active in residential as we feel it is too crowded – we try to concentrate our efforts on high-end projects.

“Of the rest, we have a lot of experience in the commercial sector and the same can be said for industrial. So where we are lacking somewhat is in the area of infrastructure. As a local contractor we have to focus on that area as there is so much going on in Qatar in that area.

"These jobs will run for three years million and will be worth between 350m and 500m riyals, so that is where we’d like to move into. We’ve worked on large projects, so the next milestone is to go onto mega projects. Up to 300m riyals we can handle on our own, but over and above that, we’d prefer to be part of a JV to share to risk and also the resources.”

Kumar explains why he believes that joint ventures can serve both parties well. “There is a preference for international contractors in Qatar, providing they have a local partner. If you have a look at the international contractors, they have opportunities worldwide, so they have problems in terms of resources such as manpower and facilities.

"What they are interested in is finding a local contractor to give them logistical and manpower support, and what they bring is the technical expertise and the top level of management. It’s a win-win situation, and we can learn from them.

“Also, the local banks require local sponsors and local companies to provide guarantees, so we can access banking finance for projects; it’s a mutually beneficial relationship. Finally, in MEP you need a license, which we have, so we can go straight onto a project. We are also able to provide the maintenance on a project when the international company has left the country.”

The ambition to take Arabian MEP on to the next level is clear and there is clearly a policy to speculate to accumulate, as the company is building a large 10,000 square metre pre-fabrication facility in new Salwa Industrial Area to meet demand for materials, while several accommodation buildings are to be built for what will be a growing labour force. In addition the company is also building a new HQ in Central Doha to further optimise and improve the efficiency of its operations.

“The labour laws are very strict here and we have no other option than to have our own manpower. We do not take manpower from the local suppliers unless we come across a critical and time sensitive situation, and even then it is for a very short time. Commercially, hiring a local tradesman is very expensive, and is not viable if we want to make good profits.

“We keep our labour that we bring in from abroad under our own care in our own accommodation. We currently have a workforce of around 5,000 and we’d like to double that to 10,000 over the next five years, again at a rate of 20% per year. To do this, we need to invest in good facilities for them and it will take time to do this as the requirements are the same.

"We are not going for a temporary type of structure such as containers; we will put together proper concrete buildings. We as a local company will be here in the long-term, so we want proper buildings.”

The plan is that more resources will be reflected in a growing balance sheet, says Kumar. “As a company we must offer a good return to our investors, and we make important decisions based on that principle. The ability to manufacture materials locally is very important to this as without them, you cannot guarantee a level of quality or when something will be delivered.

"We already have sheet metal and switch gear factories, but our aim is to triple our capacity ahead of the 2022 World Cup and the additional work from the 2030 Vision.

“Presently, we are working on projects worth around 1bn riyals, which I would like to double over a period of five years, at 20% growth per year. I believe that is a sustainable target,” Kumar concludes.

5,000
current number of company employees
10,000
Target number of employees by 2018
1997
Arabian MEP Contracting enters Qatar

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