Saudi Arabia’s project pipeline offers companies the opportunity to achieve their growth plans. One company with ambitious growth targets that is actively engaged with projects in the kingdom is France’s Egis.
Last year, as part of a French consortium, it signed a deal with the Royal Commission for AlUla (RCU) to provide programme and construction management at Al-Ula, where $3.2bn of spending has been earmarked for development infrastructure.
“Egis and Saudi Arabia at the moment are like soulmates because they have the same kind of ambition in terms of growth and also in terms of transformation,” says Laurent Germain, CEO of Egis.
Germain is overseeing major changes to the French consultancy company. “I was appointed CEO of Egis 18 months ago with two big missions. The first mission was to privatise the company,” he says.
Germain completed this first goal in January this year when French private equity fund Tikehau Capital took ownership of 42 per cent of the company's shares. The historic shareholder, the French public bank Caisse des Dépôts, now holds 33 per cent of the shares and 25 per cent is owned by the managers and employees of the company.
Egis and Saudi Arabia are like soulmates because they have the same ambition in terms of growth and transformation
Laurent Germain, CEO of Egis
“The second mission is to step up the development of the company,” says Germain. “The plan is to double its size by 2026, which means going from €1.2bn ($1.4bn) turnover right now and 16,000 employees to €2.5bn ($2.8bn) turnover in 2026.”
Egis plans to achieve this target with organic and inorganic growth. “The company will grow organically and through acquisitions," says Germain. "In the past 18 months, we have completed 14 acquisitions around the world. We have bought companies in France and abroad. We have bought three companies in the UK, one company in Australia, and we are at the stage of closing to acquire a $50m company in the Middle East.”
The Middle East acquisition will add to the purchase of Projacs, which Egis first took control of in 2015 with a 51 per cent stake in the company.
“In 2020, I decided to buy the remaining shares of the minority shareholder. This has been completed, which means Projacs is now fully integrated into our Middle East business unit,” says Germain.
The acquisitions have benefitted Egis’ top line and given the company a global footprint.
“Traditionally, Egis was very strong in France, but now we are strong in the UK, Saudi Arabia, India and Brazil. We have many legs to stand on in different continents, balancing the risks and the cycles of business, which are not necessarily the same everywhere in the world,” says Germain.
“In terms of the different continents' weight, we have France, with 38 per cent of the company's global revenues; we have Europe at 20 per cent; and the Middle East at 13 per cent. We have Apac [Asia Pacific] at roughly 10 per cent and Latam [Latin America] at 5 or 6 per cent. The remainder is Africa, with a few activities on the North American continent.”
The Middle East is part of Egis’ growth plans. “The strategy for the Middle East is not very different from the strategy for the rest of the group," he says. "It is to double the size of the turnover by 2026, which means going from $140m today to $300m by 2026. This will be done, of course, organically and through acquisitions.”
The growth expectations for the Middle East are fuelled by a ramp-up of project activity in Saudi Arabia.
“Our turnover in Saudi Arabia has tripled in a very small amount of time. That is because the projects are of a scale that is bigger than anywhere else. The iconic nature of the projects is also like nowhere else. That is why so many companies are now focusing on the Middle East,” says Germain.
Large projects are not only attracting companies, but also offer opportunities for people who want to work on major projects that will transform a country.
"The size of the projects means you have visibility. And you can also attract young talents – locally, of course, but also from other parts of the world," says the CEO. "This is where the attraction lies in the Middle East: the iconic nature of projects and the way they will change the face of the Middle East from an oil-driven business into a much more balanced economy.
"And I think a lot of young people like to take part in something that will change the living conditions of the people of the Middle East."
Innovation is also an important factor as cutting-edge projects attract talent and allow companies to differentiate themselves from the competition.
“In the Middle East market, and especially Saudi, the customer is really looking for innovation. We are driven to continue investing in innovation because this is one of the reasons why we would be chosen rather than another consulting company," says Germain.
"And this is why I'm interested in the Saudi market because if you don't bring top-class expertise and innovation, you're not chosen as they want first-class engineering and innovations.”
The challenge in Saudi Arabia is not just getting people on board; it is attracting local Saudi talent into the construction sector.
“As revenues rise, we need more staff to be hired. At the same time, there is the localisation of staff, so we need to increase the number of employees while also increasing the share of local employees," says Germain. "This is fine because we are here for the long term and we are very proud to be part of training young engineers from Saudi Arabia. That's why the company must remain attractive.”
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