MOHAMED Metwalli and four fellow Egyptian engineers decided in 1987 that they could make an impact on the local construction scene. They can scarcely have dreamed that 12 years later their company, Arabian International Construction (AIC), would be recognised as one of Egypt's leading contractors, described by a prominent European investment bank as 'one of two local partners of choice for international contracting companies operating in Egypt'.

Metwalli was recently invited by the investment bank Societe Generale to address some of its clients at a seminar in London. The requirement to do this is a consequence of AIC placing a block of its shares with international investors in 1997.

Metwalli used the gathering as an opportunity to propound his distinctive views on the management of construction companies. 'AIC believes it can realise 90 per cent of the quality achieved by international contractors, but at 60 per cent of the cost,' he said. The company first applied this in bidding for, and winning, a series of contracts on the civil works and mechanical erection side of power station projects. The company started to win increasingly large orders as part of major infrastructure schemes, such as the Suez Canal water siphon and the Esna barrage, before landing its most substantial contract yet, in 1998. This was the $450 million Toshka pumping station project, on which AIC is doing about 40 per cent of the work as part of a consortium which also includes the Anglo/Norwegian Kvaerner Construction and Japan's Hitachi. AIC's association with high- profile projects has recently been confirmed, with the mid-July award of a $60 million contract, in joint venture with Italy's Rodio, to build the quay walls for the new East Port Said container terminal.

Metwalli said that he puts enormous emphasis on creating the right internal systems for the companies. He believes construction firms have tended to give far too much control to project managers on the site. His approach is to downgrade the importance of project managers and to invest heavily in specialised resource management at the centre. He has recruited a former employee of Raytheon Corporation of the US to run AIC's logistics, and has an ex-Wal Mart man running the company's stores. He has not completely dispensed with traditional contractor values, however, recruiting Terry MacDonald from Balfour Beatty of the UK to work as AIC's head of construction.

Metwalli has sought to develop powerful design and planning centres inside the company, so as to avoid over-reliance on consultants. He said he is seeking to achieve the kind of consistency of service commonly achieved in the retailing and manufacturing sectors, but all too rare in contracting. 'We want to be the McDonald's of the construction business.'

This ambition extends to international markets, not just Egypt. Metwalli put the size of the Egyptian construction market at about $12,000 million a year, compared with $650,000 million in the US. 'The limited size of the home market means we need to grow outside. We have discovered that we have a sustainable competitive advantage that works abroad just as well as in Egypt.'

To this end, AIC has pursued opportunities in Kuwait, Libya, Turkey, Uganda and Kazakhstan, and earlier this year it acquired the international arm of UK contractor Fitzpatrick to help it develop markets outside Egypt.

That acquisition and the East Port Said order have pushed AIC's backlog of active construction work to úE 3,000 million ($880 million). Its turnover totalled úE 580 million ($170 million) in 1998, when it made a consolidated net profit of úE 42 million ($12.3 million). Societe Generale forecasts that turnover will reach úE 800 million ($235 million) in 1999, and will be close to úE 2,000 million ($580 million) by 2003.

With 43 per cent of the company held by institutional investors, most of them international, AIC is exposed to a high level of scrutiny. So far, at least, it has managed to keep the investors satisfied.