UAE construction firms expanding?

Are firms moving further afield?

What do you do when the once lucrative construction sector in the UAE, namely Dubai, dries up and disappears? Well in the case of Dubai based Al Habtoor Leighton Group, you expand... into Kuwait, Oman and Libya.

As opportunities get fewer and fewer in the UAE, the company has decided to shift its focus further afield and as such has seen orders rise 36 percent over the past year. It makes sense - since the Dubai debt crisis hit at the end of last year, the property market in the UAE (with possibly the exception of Abu Dhabi) has plummeted with some house prices falling by as much as 60 percent and a whole of projects being cancelled.

Expanding outwards

Instead of waiting for things to get better, companies have spread outwards into neighbouring regions and in the case of Al Habtoor Leighton Group it has worked. Speaking to Reuters, Laurie Voyer, chief executive and managing director, said: "I think the business over the next couple of years will change for us away from the UAE."

"I expect in the next two or three years the surrounding Gulf countries will contribute about the same as what the UAE has done for us in the last couple of years."

While Leighton Holding is based in Australia, Al Habtoor, an affiliate, is well established in the Middle East and has previously seen 80 percent of its revenues coming from the UAE. However with the company diversifying, this is expected to fall to 50 percent.

Instead the company is expected to turn to countries like Qatar where the firm already operates. By expanding operations there as well as in countries like Saudi Arabia, Kuwait, Bahrain and Oman, the company is expected to see revenues go back up.

They aren't the only ones though - many UAE based construction firms have been heading to Qatar for work, in order to take advantage of the country's growth which is expected to expand by seven percent this year.

By going to countries such as Qatar, Al Habtoor's total order book is expected to rise to around $8.17 billion over the next year from around US$5.98 billion. Projects include possibly being responsible for the Kuwait airport runway development (to be confirm) as well as a number of hospitals, educational facilities and road and civil infrastructure.

Previously, the firm has worked on the US$1.8 billion St Regis Hotel and the US$1.4 billion Khalifa Port projects in Abu Dhabi.

Relevant articles:

Are Emirates Park Towers on track? | UAE's energy expansion and nuclear plans | Oman investing in infrastructure

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

Like this article? Get the RSS feed: