Interview: Planning for business after the World Cup

09 June 2015

Moutaz al-Khayyat, the CEO of Qatari contractor Khayyat Contracting & Trading, has his eye on new markets, as he looks ahead to life after the World Cup

Less than five years after moving its headquarters from Syria to Doha, Khayyat Contracting & Trading (KCT) and its sister company UrbaCon Trading & Contracting (UCC) have become dominant forces in Qatar’s construction sector.

Since making the move in the first quarter of 2011, the two companies have executed 25 major projects in Qatar including some of the country’s most high-profile developments.

These include the refurbishment of Doha’s Sheraton Hotel, which was completed in December 2014, the luxury Banana Island Resort off the coast of Doha, which opened earlier this year, and the Lekhwiya sports stadium at Al-Duhail.

“Construction is different to other businesses. When you are a contractor it is not easy to be successful,” says Moutaz al-Khayyat, CEO of KCT and UCC. His father, Mohamad Moutaz al-Khayyat, started the businesses in Damascus in 1983.

“There are so many variables. You need good planning, good management, good experience and you need to have a team where every member is an expert in their field,” he adds.

Secrets to success

Al-Khayyat says that attention to detail and a commitment to completing contracts to a high standard are the secrets of his companies’ success.

“Before we started our first project in Qatar we had already checked the market very carefully,” he says.

“We looked at other contractors who hadn’t been successful and examined where they went wrong. There was a lot of detailed research.”

Many contractors that try to enter the Qatari construction market don’t make enough effort to understand the country’s business culture, according to Al-Khayyat.

“Some of the companies that come to Qatar from outside don’t know what the process is here and they don’t know what the rules are. And sometimes they complain that they haven’t been paid on time or they are having problems with bureaucracy, but often this is their own fault,” he says.

“If a company doesn’t learn about the country and the culture and how they should deal with business people, then they will run into problems. It’s very simple,” he adds.

The attention to detail does not stop after a tender is won and construction starts. Workers for UCC say their CEO has a habit of making morning site visits and a reputation for carefully tracking project developments.

“My brother, my father and I follow every project very closely, but we’re also careful to delegate responsibility,” says Al-Khayyat.

“We have an integrated management structure and a core team of senior managers who have been with the company for a long time and know their jobs inside out.”

Building trust

One factor that is of utmost importance in all construction markets is building trust with clients, he says. “All of our projects are very high pressure and challenging, but every time we have managed to carry out the work on time and to high standards,” says Al-Khayyat.

“Our clients have all been very happy with our work and, because of our track record, they respect the company. Our name and our reputation have been key to our success.

“In the lifetime of the company, every project has been finished successfully and to the satisfaction of the client,” says Al-Khayyat.

KCT started building its relationship with Doha long before it moved its headquarters there, forging ties with the state-owned real estate company Qatari Diar when it built palaces for the Qatari royal family in Syria about five years before the Syrian civil war started.

“We came here partly as we had good working relationships with a number of clients here,” says Al-Khayyat. “They believed that if we relocated, we would be successful.”

One of KCT and UCC’s flagship projects is the Mall of Qatar, which is one of the country’s biggest commercial projects.

Under current plans, it will span 550,000 square metres, provide parking for 7,000 cars and attract 20 million customers a year.

Construction of the mall started in 2012 and is due to be completed in the fourth quarter of 2015, ahead of the opening of another Qatari retail complex, Doha Festival City, construction of which began in 2007.

“Working at such a fast pace would be a challenge to any contractor, but I am confident that the project will be a success,” says Al-Khayyat.

Other ongoing projects include the modification of Doha’s Souq Waqif Hotel, the construction of the Union Residential Tower, a high rise that will be located in Doha’s Al-Dafna district, and the development of the Fire Station arts space, which will see a former fire station transformed into a creative hub containing a gallery and studios.

World Cup projects

KCT’s move to Qatar came just weeks after football’s governing body, Fifa announced that the Gulf nation would be hosting the World Cup in 2022.

The impending tournament has created a frenzy of construction activity as Qatar prepares for the influx of foreign teams and fans.

KCT was the main contractor on the 20,000-square-metre Lekhwiya sports stadium, which was inaugurated in February 2013 and is due to function as a training venue during the World Cup.

Future projects may include building some of the stadiums where the 2022 World Cup matches will be played.

“We have submitted bids on many projects for 2022, but these have not been awarded yet,” says Al-Khayyat.

“As the tender process progresses, we are optimistic about our chances of securing at least some of the contracts we have bid on.”

“Qatar’s construction market is very good and, over the next seven or eight years, there will be plenty of opportunities,” he adds.

After the intense project activity in the run-up to the tournament, though, the CEO believes there will be a quiet period for contractors.

“We know that in the future the construction sector will not be as it is today, and we have planned for that,” he says.

One of the ways KCT and UCC are preparing for life after the 2022 World Cup is by moving into markets outside Qatar.

UCC is already working in Oman and Morocco, and is planning to open a new office in Saudi Arabia within the next six months, where it is “already dealing with the paperwork”.

The appeal of Saudi Arabia for UCC is the country’s very active construction market and the range of opportunities for contractors.

In Morocco, Al-Khayyat’s business development team has identified pent-up demand for large, experienced contractors that have a track record of executing successful design-and-build projects.

UCC is currently working with developers on plans for a hotel and resort in Morocco and intends to announce details over the coming months, with construction starting by the end of the year.

In Oman, UCC has identified a range of specific private-sector opportunities.

Al-Khayyat says that when he looks for business in new markets, the quality of available projects and the potential opportunities in the market it could provide UCC are his first considerations.

“The key is finding good opportunities and good clients,” says Al-Khayyat.

“When we look at new markets the project comes first: is it a good project? Secondly, we look at whether the client will suit the way that we work. Thirdly, we look at the country itself: is this somewhere we can do business?

“We’re very conscious that new markets involve new risks. We know that Morocco is a very different business environment compared with Qatar, and because of this we’re not afraid of tailoring our business model to reduce risk.”

Continuing diversification

Another way Al-Khayyat is preparing for the expected construction slowdown after 2022 is by diversification and shifting focus to companies outside the construction sector.

In addition to KCT and UCC, the Al-Khayyat family owns 15 other firms that span a range of industries and sectors. These include general contracting companies, commercial and residential developments, building materials suppliers, trading companies, hospitals and restaurants.

“Although there is likely to be a lull for contractors we believe services will still be strong, including sectors like management and hospitality,” says Al-Khayyat.

“We have a vision that should see our companies continue to grow even if Qatar’s construction sector slows.”

UCC ongoing construction projects

  • Souq Wakif Hotel
  • Union Residential Tower
  • Mall of Qatar
  • Fire Station Arts Centre
  • Jery al-Samur Development
  • Souq al-Najada

Selected completed projects

  • Sheraton Doha – renovation
  • Hilton Hotel
  • Anantara Doha Island Resort

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