KHARAFI: Local giant with global ambitions

02 April 1999
SPECIAL REPORT CONSTRUCTION

ONE name that is a permanent feature of bid lists for major building projects in Kuwait is Mohamed Abdulmohsin Al-Kharafi & Sons. The company is the country's largest general contractor and has been working in the local construction sector for over

40 years. But Kharafi's ambitions are not limited to Kuwait. The majority of the company's work is now outside the country, including in such far- flung places as southern Africa and the Caribbean.

Kharafi has a rich heritage. Established as a trading company more than 100 years ago, it opened its factories division in 1956 with 25 employees and 200 labourers. The firm has grown rapidly on the back of the exploitation of the country's oil reserves and today it has 2,500-3,000 employees working on construction schemes across the globe.

During the 1990-91 Iraqi occupation, the company managed to keep its overseas operations working normally. After liberation, it was one of the few local firms able to start immediate work on the reconstruction of the country and was the only local contractor prequalified by the US Army Corps of Engineers (USACE), which co-ordinated the emergency works programme. 'Kharafi got the lion's share of post-liberation construction,' says marketing manager Hussain Azmi.

It rebuilt the gutted National Assembly building in just six months, repaired much of the war damage in central Kuwait City and reconstructed the import cargo complex at Kuwait International Airport. The firm has also participated in some of the most prestigious construction projects to be tendered since the war. These include the new Emiri Diwan and the 370-metre tall Liberation Tower in the heart of Kuwait City.

Since the end of post-war reconstruction, the Kuwait construction sector has slowed dramatically, largely as a consequence of the squeeze on public expenditure caused by successive years of budget deficit.

However, the company remains active in the domestic market. Current projects include:

Construction of the fifth ring road - $61 million - a contract was awarded in 1995 and work is for completion in mid-1999. The client is the Public Works Ministry.

Science Centre for Kuwait Foundation for the Advancement of Science - $40 million - awarded in 1997 and due for completion by the end of May.

Kuwait Chamber of Commerce & Industry headquarters - $32 million - Kharafi began work in 1996 on this project, which involves the construction of a 17-storey tower. The project is due to be completed by the end of the year.

Al-Muhalab shopping and residential complex - $29 million - Awarded earlier this year, the project involves the construction of a six-floor shopping mall. The client is Wafra Real Estate Company.

With few prospects of a dramatic turnaround in the Kuwaiti market, the main focus for the company has shifted overseas. 'We started a drive to work abroad three or four years ago,' explains Azmi. 'We are seeing the results now.' The company estimates that only about 35 per cent of its current workload is in Kuwait, compared to about 60 per cent five years ago.

Kharafi has had an overseas presence for more than 30 years. Its office in Saudi Arabia was opened in 1965 and three years later it set up in the UAE. However, the pace of expansion abroad has rapidly increased in the 1990s. In the past seven years it has opened offices in Albania, Eritrea, Indonesia, Lebanon, Lesotho, Nigeria, South Africa and Tanzania. The company now has a presence in 15 countries.

In several countries, Kharafi has been able to work on projects financed by the Kuwait Fund for Arab Economic Development which has an extensive aid programme across the developing world. In Africa, the company is eligible to work on projects funded by the African Development Bank, of which Kuwait is a member.

In the Middle East, Kharafi has been active in Lebanon and Egypt. In Lebanon it is working on an underground car park, the Khaldeh-Cocodi highway and the rehabilitation of the Al-Karmah hotel at Bahmdon. 'Lebanon has been good for us, but we don't think it will stay good,' says Azmi. 'We have seen the best of Lebanon already.' In Egypt, it is developing tourist facilities in El-Arish and Sharm el-Sheikh. 'We are consolidating in Egypt and not seeking new projects,' Azmi adds.

The UAE has also proved a lucrative market. The firm is working on a twin water transmission line and a number of large road schemes. 'The UAE has been slowing down tremendously, but we should sign two big projects this year,' says Azmi.

Elsewhere, Kharafi's project list is long and exotic. It includes:

National Park Hotel in Tirana, Albania - $55 million - work on the 124- room hotel began in 1996 and is scheduled for completion later this year.

Mali Rabit Tourist village in Albania - $8 million - The 80,000-square- metre complex contains villas, apartments and entertainment facilities. It is due to be finished this year.

Radio and television station in Gabarone, Botswana - $33 million - The project is a 50:50 joint venture with the UK's Costain, of which Kharafi is a significant shareholder. The contract was awarded last year and work is expected to take three years.

International airport terminal in Addis Ababa, Ethiopia - $71 million - Work has just commenced on the scheme, which involves the construction of a 60,000-square-metre terminal building, a 50,000-square-metre concrete apron and infrastructure works. It is due to be completed in mid-2001.

Port Development at Nevis, West Indies - $20 million - Work is due to be completed by the middle of the year.

Buraidah wastewater treatment plant, Saudi Arabia - $42 million - Work is due to be completed by next June.

Plaza in Dar Es Salaam, Tanzania - $27 million - The project involves the construction of a shopping complex, offices and residential accommodation. Due to be completed in July 2000.

Kharafi hopes to add to its order book in Africa. 'Now we have an Ethiopian office we can look at East Africa,' says Azmi. 'Being on the ground makes a real difference.' The company is also looking at the west African markets, but concedes that French firms are well-established in the area and will be hard to shift.

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