ACC is preparing for change at the senior management level as it pursues growth outside the UAE
Arabian Construction Company (ACC) was formed in 1967 in Beirut by three individuals from two families: Ghassan Merehbi and Anas and Taha Mikati. Like many Lebanese businesses, the founders soon realised that to deliver the desired growth they would have to pursue opportunities outside Lebanon.
The options presented to them at the time were Syria and Abu Dhabi, and the rest of the UAE. The company has grown into one of the largest contracting organisations in the Gulf and the wider Middle East. In 2007, it secured $2.73bn worth of new orders and by this measure was ranked the sixth largest contractor in the Gulf by MEED.
ACC remains a family-owned business controlled by the Merehbi and Mikati families. Ghassan Merehbi is the chairman and president and Anas Mikati is deputy chairman. Both are based in Abu Dhabi. The board consists of five executive directors, all of whom are members of the founders’ families, and two non-executives directors from different industries.
Date established: 1967
Main business sectors: Construction
Main business region: UAE
Chairman/President: Ghassan Merehbi
Wassim Merehbi and Rasheed Mikati are based in Abu Dhabi and responsible for support services and business development respectively. Maher Merehbi is based in Beirut and covers the Levant, Omar Mikati manages Qatar and Hamid Mikati is also based in Abu Dhabi and covers the regional operations.
The board adopts a hands-on approach and the management structure of the company is such that at least one of the family members is involved in all major management decisions in co-ordination with senior managers.
ACC’s geographical outlook extends from Morocco to Oman, with some occasional work in Pakistan. The majority of its work is large-scale building projects such as high-rise and major mixed-use developments. It also works in other areas, with a strong track record in the power and desalination sectors.
On the management level, ACC’s corporate headquarters remain in Beirut. From there, the firm runs projects in Lebanon, Egypt, Syria, Jordan, Iraq and other potential markets such as Algeria and the rest of North Africa.
Abu Dhabi is the regional headquarters for the Gulf and, reflecting the workload in the region, it is the company’s biggest office. It also runs the local operations in Abu Dhabi, where the firm is working on several major projects.
In the Middle East, ACC also operates through several autonomous offices such as those in Dubai and Qatar.
In total, ACC employs about 27,000 people full time. Managerial and technical staff account for 10 per cent and 90 per cent are construction workers. The firm also employees another 7,000 people in Lebanon, Egypt, Syria and Jordan as construction workers, but these are not full-time employees because, unlike the Gulf, contractors in these markets can rely on the local population to provide manpower as and when it is needed.
To meet the specific needs of critical projects, ACC prefers to work without a joint venture partner. For example, it is working on Sky Tower, Central Market and Etihad Towers in Abu Dhabi by itself. It has formed joint ventures on some projects such as the Al-Mas Tower in Dubai, and has a long-standing relationship with Netherlands-based Interbeton. The two companies have worked together on several projects.
Joint ventures are also used to bring the firm new skills. It has expanded its interests to marine works by forming a joint venture with Hong Kong-based Leader Marine. The joint venture is working on several projects in the UAE and, after some initial success, the two companies are exploring other opportunities in neighbouring countries.
ACC is currently planning how the company will be passed on to the next generation of Merehbis and Mikatis. Ghassan Merehbi and Anas Mikati will remain on the board, but they are preparing to move away from full-time management and pass on day-to-day control of the company to a new chief executive officer who will take the company forward for the next few years. This new position, which will be announced later this year, will be filled by one of the current executive directors.
Other changes to senior management will also be made. The firm is working with a consultant to help restructure the board and then organise how to best manage the company’s different offices, regions and functions.
The business plan for the coming years is a familiar one. ACC intends to remain a private construction company covering the Middle East and North Africa. The main change will be the sectors in which it operates and the integration of new entities to the group. The company is well known as a high-end building contractor and, more recently, as a high-rise specialist. But in emerging markets in North Africa, these skills are often redundant as clients looks for firms to build basic infrastructure such as roads, services and water treatment.
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