In just over a year, Hasan Abdulla Ismaik has become the most talked-about man in the region’s construction sector.

Since taking the helm at Dubai-based Arabtec Holding on 13 September 2012, he has made a series of daring moves that has seen the company sign multibillion-dollar construction contracts, form joint ventures that will take it into new sectors such as oil and gas and heavy infrastructure, and take complete ownership of its subsidiaries.

My focus is how we manage the sites. For me every site is like a new firm, and it needs a CEO

With so much activity on all fronts, it is easy to lose sight of what the company is trying to achieve, but for Ismaik the ultimate objective is a simple one. “The strategy for Arabtec is to be the biggest construction company in the Middle East,” he says.

Targeting professionalism

The ambition is a bold one for a newcomer to the construction industry. When Ismaik arrived at Arabtec, he realised he had a lot of work to do. “I come from a real estate background,” he says. “I developed many buildings myself as an investor, and I noticed when I built my properties that construction firms in the Middle East are not professional enough.”

Before he could move on to the task of modernising Arabtec and making it the biggest construction company in the region, Ismaik had to understand a new industry.

“When I arrived at Arabtec, the first two weeks to one month were difficult for me because I did not understand things like procurement and estimations,” he says. “But I told myself this is a challenge for me, I have to understand this business very well. This is why in the beginning I centralised everything. I needed all the managers to come to me, and when they asked me to sign something I asked them why are you doing this? It made me tired; I was working 16-hour days, but I learned very quickly. After three months, I knew construction better than construction people.”

We will open a special division for build-operate-transfer schemes like airports, metros and pipelines

After three months of immersing himself in construction, Ismaik was able to develop a more detailed assessment of Arabtec. “In Arabtec, I saw a good construction firm that needed to develop its strategy and systems and bring in more expertise,” he says. “[The 2008 recession and real estate crash] affected all the contractors. It was a big problem and no CEO could manage it easily. People who work in construction have a different mentality from those in other businesses because their background is engineering. They do not have a management background, and while people are good technically, the company needed more business people.”

The challenge for Ismaik is finding these people. “The problem is there are not a lot of people that are ready to join a construction company,” he says. “That is because people normally work in construction firms for a long time and if you want to bring people from outside [the region], there are different systems. They cannot succeed here like they can in Germany, the US and the UK. So you cannot bring in expertise from outside and we don’t have many people here.”

Hiring youngsters

With limited options, Ismaik admits he has a big challenge. His long-term solution is to mould that expertise from within the region. On 3 February, Arabtec launched a campaign to recruit 10,000 youths across the Middle East and North Africa (Mena) region. The recruitment campaign will begin in the UAE, and will target ambitious local youngsters who are eager to contribute to their country’s development.

The more immediate challenge is finding the people to manage Arabtec’s backlog, which following the signing of a AED22bn ($6bn) agreement in January to build 37 towers in Dubai and Abu Dhabi, is now sitting at about AED60bn. For him, the most important thing to get right on a project is the project director. “My focus is how we manage the sites,” he says. “For me, every site is like a new firm, and it needs a CEO.”

Arabtec has already begun to empower its project directors. “Four months ago, we gave power to our project directors so that they make decisions on everything and manage the site,” says Ismaik. “We have a big team on one floor with 200 people supporting. We also have a strong finance department for auditing. Every scheme needs good leaders. You need a leader to clear the site, bring in labour and manage subcontracts. If you make it complicated, it will be complicated.”

The volume of work that Arabtec now has to deliver means managing subcontracts will be crucial. “We will use other construction companies as subcontractors,” says Ismaik. “For me, the project director is the key. I will choose a project director that can make this happen. We will support him with systems and finance.”

Taking on new work is not something Ismaik is afraid of and he is developing new business units to target market niches in which Arabtec is not active, such as build-operate-transfer (BOT) projects. “We will open a special division for BOT schemes like airports, metros and pipelines,” he says. “We will enter this business big time because it is very important. It opens two sides. One side is investment, as Arabtec will retain 20-30 per cent [of the built asset/operation]. The second side is I will use my construction business to build everything.”

Overseas growth

Geographically, Ismaik sees a wide market for BOT projects across the Mena region, sub-Saharan Africa and southern Europe, including countries such as Serbia where Arabtec recently opened an office. “We will go anywhere that has a good investment [opportunity] and I can [get construction work],” he says.

BOT schemes are more complex than traditional construction projects as they require the contractor to organise funding. “We have good relationships with banks in the UAE and Saudi Arabia, as well as international lenders,” says Ismaik. “But I will not depend on the banks. Of course we want to work with them, but if not possible, we will go for other solutions. We can create funds and sell businesses with investors joining with us. We have a good team for that.”

The other important facet of BOT is political connections. “Arabtec has strong relationships,” says Ismaik. “Many people respect the firm and its new management, and we are working with governments very closely, here [in the UAE] and outside, in the GCC, Middle East and Africa. We understand politics and how it works. This will help both sides.”

Arabtec is also targeting the engineering, procurement and construction (EPC) market and in September last year, formed a joint venture with South Korea’s Samsung Engineering to obtain the qualifications needed for work in the energy sector. “We don’t have those qualifications so we signed [a joint venture agreement] with a firm that does have the qualifications,” says Ismaik. “Within two or three years Arabtec will have these qualifications alone.”

Arabtec is close to forming a similar company for heavy infrastructure work. In early November, the firm announced it had signed a memorandum of understanding with South Korea’s GS Engineering & Construction to target heavy infrastructure projects. The joint venture is due to be officially formed in the coming months.

Ismaik expects these firms to win work soon. “We already have three or four big job opportunities with Samsung and GS starting in Iraq,” he says. “We are opening an office in Baghdad and we are in discussions for oil and gas work for a big pipeline and infrastructure work.”

Additionally, Arabtec will enter other construction-related sectors. “We will now start venturing into other businesses such as manufacturing, hotels, real estate and telecoms,” says Ismaik. The first foray is real estate. In December last year, Arabtec launched a new subsidiary named Arabtec Real Estate Development Company, which will focus on developing lifestyle communities, initially in Abu Dhabi and Dubai, through joint ventures with major developers and investors in the UAE. In the longer term, it plans to expand to other GCC countries and the wider Mena markets. The new firm will also look to tap into the growing demand for affordable housing in the region, with a particular emphasis on key markets such as the UAE, Saudi Arabia, Egypt, Algeria and Morocco.

Floating shares

Corporately, Arabtec Holding plans to launch a series of initial public offerings (IPOs) on regional and overseas exchanges in 2015. This will allow it to merge and partner with local players and strengthen its presence in markets outside the UAE. “I have five or six IPOs [planned],” says Ismaik. “[These are planned] so that the firms will grow more and merge, because I cannot merge with Arabtec Holding.”

The location of the first IPOs, planned for 2015 and 2016, has not been finalised. There are various options available on markets in London, New York and Hong Kong, as well as on regional bourses, where Arabtec is already operating as a contractor. “[The IPOs] will start in 2015 and 2016; we have yet to choose [the location], but we will study [options],” says Ismaik. “For example, we could IPO Arabtec Construction Saudi Arabia, where we have 10,000 people, [or in] Qatar, Kuwait, Baghdad or Jordan. Arabtec will have arms across the Middle East and Africa in the future.”

Arabtec Holding will be the majority shareholder in these companies, which Ismaik hopes will merge with other contractors, especially family businesses that want to go public. “I welcome any company that has good engineers and good systems,” he says. “I also advise family companies to [merge] with Arabtec, because stability comes from public companies not from family businesses.”