There are not many better corporate barometers of the current state of the Middle East construction market than Consolidated Contractors International Company (CCC). Acknowledged as the region's largest and most geographically diverse contractor, the Athens-based company has ridden high on the oil price-driven recovery over the past five years, with both group revenues and manpower climbing by about 50 per cent to stand at $1,834 million and 61,000 people at the end of 2003. On the back of such growth, the family-owned company has taken the opportunity to extend its geographical reach and its capabilities across the full length of the construction value chain.
CCC is still very much known for its ability to carry out large-scale construction projects, particularly in the oil and gas sector, and it is not difficult to see why. It is nearing completion of the $900 million Karachaganak gas development project in Kazakhstan, is well under way on the $200 million Sohar refinery construction package in Oman and has recently been awarded the train-5 construction works at the Ras Gas Liquefied Natural Gas Company (RasGas) complex in Qatar. But having been around for over half a century, CCC knows only too well the shifting sands of the Middle East projects market. 'We have to be able to take care of the ups and downs in construction, which by its very nature is cyclical,' says Samer Khoury, CCC's executive vice-president for operations. 'When you don't have work, you not only lose revenues, but you also have to find ways of keeping your staff busy. We have 8,000 permanent staff and we have a policy of not laying people off.' To counter the vagaries of construction, CCC is increasingly stepping up its project development activities. 'Development provides balance to our business. It creates opportunities for staff to grow within the company. It also provides business for our construction division,' says Khoury. CCC is hardly a novice in the development arena. Through the development division, run by Wael Khoury, it has built up interests in telecoms, oil and gas, water and power, with stakes in Yemeni GSM operator Sabaphone, Yemeni oil blocks 44 and 45, the Al-Samra wastewater scheme in Jordan and the Gaza independent power project (IPP). Yet, its investments still generate less than 10 per cent of total revenues. CCC is adopting a twin-track approach to growing its development portfolio. On the one hand, it is looking to expand its interests in areas where it already has a presence. In Jordan, it is bidding in a joint venture with Japan's Marubeni Corporation and US-based BTU Ventures for the purchase of a 51 per cent stake in Central Electricity Generating Company (Cegco). It has also taken a 20 per cent equity stake in the consortium negotiating the estimated $600 million Disi water transmission project. In Gaza, where it holds a 40 per cent stake in Gaza Power Generating Company, plans areafoot to add three 30-MW units at the 120-MW IPP. The plant could eventually be fired by gas from an offshore field, discovered by the UK's BG and CCC and which has proven reserves of 1.5 trillion cubic feet. In Yemen, it has not given up hope of signing the concession for the 400-MW Marib IPP, despite having been in negotiation with the government for three years. The other strand in CCC's development strategy is to break into the growing GCC utility sector, particularly into areas such as water, power and sewerage. Says Khoury: 'We want to move aggressively into the Saudi Arabian, Abu Dhabi and Omani IPP markets. That will give us a more balanced utility portfolio and the option to eventually raise finance through local stock markets with a fund. It will also position us to do more construction.' The approach has already been demonstrated on the Sohar independent water and power project (IWPP). CCC had a 10 per cent equity share in the losing bidding consortium
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