Kharafi National

06 July 2010

The Kuwaiti contractor looks to build on its Middle East success by expanding its African operations

Company snapshot

Date established: 1976

Main business sectors: Construction and infrastructure development

Main business regions: Middle East and North Africa

Vice-chairman and managing director: Samer Younis

Kharafi National structure

Kharafi National was set up by Nasser al-Kharafi and Ghalib Younis in Kuwait in 1976 as a local contracting company serving Kuwait’s construction industry. At the time, it was the region’s first mechanical, electrical and plumbing contractor in the region. It has since grown into an infrastructure developer, contractor and facilities management services provider with branches across the Middle East and North Africa (Mena) region.

Its vice-chairman and managing director is Samer Younis. The company has eight subsidiaries based in Kuwait, Dubai, Abu Dhabi, Egypt, Lebanon, Qatar, Saudi Arabia and Bahrain. Kharafi National also owns two supporting firms, ABJ Engineering & Contracting, which manufactures pipes and heavy industry steel structures and Gulf National Insulation Systems, which manufactures cladding materials.

Kharafi National employs more than 25,000 people. In 2009, the firm posted revenues of $1bn.

Kharafi National operations

Kharafi National’s main focus is on the oil and gas, petrochemicals, and power and water sectors. Over the years the company has diversified its operations to include infrastructure development; engineering, procurement and construction (EPC) management; facilities management; and the fabrication of process equipment and heavy structures for the industrial and civil construction sectors.

The company also provides civil works; heating; ventilation and air-conditioning; mechanical and electrical engineering; instrumentation systems; telecommunications; quality assurance and control processes; and health, safety and environmental assessments.

Recently completed projects include the $138m large-scale pilot steam flood facility in 2009 for a joint venture of Kuwait Gulf Oil Company and Saudi Arabian Chevron, and the construction of a 40-foot gas pipeline at Mina Abdullah in the first half of 2010.

Many of Kharafi National’s projects are based on build-operate-transfer (BOT), build-operate-own (BOO) and public-private partnership (PPP) models. These projects typically have a concession period of 20-30 years.

The firm has its own heavy construction equipment comprising more than 3,500 units and owns fabrication facilities for piping, structural steel, pressure vessels, skids and packages that meet the American Society of Mechanical Engineers standards.

Kharafi National is headquartered in Kuwait’s Al-Rai industrial area. It also operates two manufacturing sites in the country at the Shuaiba and Mina Abdullah industrial areas. In addition, the company has permanent bases in the UAE, Egypt and Lebanon, which employs 19 per cent of the firm’s total workforce.

Kharafi National has been present in the UAE since 1995 when it opened its Dubai branch. The following year the company established a base in Abu Dhabi.

Both companies are operated as standalone entities. In the UAE, the firm initially launched itself as a mechanical, electrical and plumbing contractor, before moving into the district cooling sector in 2000.

In 1999, Kharafi National set up its Egypt unit and is active in natural gas conversion projects and the installation of gas distribution networks in the commercial and industrial sectors, including the Port Ghalib resort on the Red Sea coast. Its operations in Lebanon were set up in 2003 after the firm identified the country as a growth market for facilities management.

Kharafi National ambitions

Kharafi National’s experience in PPPs sets it in good stead in the region as governments look to shift the burden of infrastructure spending onto the private sector.

The firm is currently undertaking the EPC work of a BOT project awarded in 2007 by Abu Dhabi Municipality to Emirates Company Holding (EUCH) in which the Kharafi Group owns 40 per cent of the shares.

The contract involves the management and disposal of municipal solid waste in the Greater Abu Dhabi region and the Western region. Once the system is operational, Kharafi National will operate and maintain the facilities for the duration of EUCH’s 10-year concession. The project is due for completion in late 2010.

The firm has built up a strong presence in the Middle East and has said it wants to extend its footprint in Africa. The company has previously completed mechanical and electrical works for projects in Ethiopia and Gambia.

Egypt capitalising on opportunities

Kharafi National set up operations in Egypt in 1999. The firm was quick to spot growing opportunities in the Egyptian and African markets and established Kharafi National-Egypt as a mechanical and electrical contractor.

The firm was quick to spot growing opportunities in the Egyptian and African markets

With a focus on natural gas conversion projects and the installation of gas distribution networks, the company was selected in 1999 to construct the gas distribution network in El-Salam City. This was closely followed by a similar project in Buhairah City and another just one year later at 6th October City.

The company was also awarded the gas contract for Alexandria City in 2001. It proved to be the largest gas distribution network project Kharafi National carried out at the time, taking four years to complete.

At the same time, Kharafi National was selected as the key contractor for the electromechanical and infrastructural projects at the Port Ghalib resort on the Red Sea Coast.

Developed by Kharafi National affiliate Kuwaiti-based Mohammed Abdulmohsin Al-Kharafi & Sons Company (MAK Group), the Port Ghalib resort is located in Egypt’s Marsa Alam region. It is a luxury development incorporating hotels, villas, a marina, a business centre and the Coral Reef Village.

The developers selected Kharafi National to work on several projects in the area. The first was a year-long contract awarded in 2003 to supply and install the heating, ventilation and air-conditioning (HVAC) systems for the villas in Port Ghalib. This amounted to some 12,000 HVAC systems being fitted during a 12-month period.

In the same year, Kharafi National won the contract for the installation of sanitary, electrical and HVAC works at the resort’s Coral Beach Diving Hotel, a four-star hotel incorporating more than 200 rooms.

In 2004, under a two-year contract, the firm was brought in to construct the electro-mechanical works at Port Ghalib. This included the installation, insulation, fitting and subsequent maintenance of electrical wiring and equipment across much of the resort. Projects, such as these have enabled Kharafi National to transfer its electrical contracting expertise to Port Ghalib’s surrounding and developing areas.

The Marsa Alam International airport has been the focus of an ongoing expansion project since it opened its doors in 2001.

Its developer is also MAK Group, and expansion projects have seen the terminal and aircraft parking stands double in size, with the capacity to handle nearly 48,000 passengers a day. The Red Sea airport’s expansion was originally slated to begin in 2011, but the project was brought forward in response to the rapid growth and increasing popularity of the neighbouring Port Ghalib resort.

In 2006, Kharafi National carried out the electromechanical works needed for the upgrade and extension of the airport. The firm completed the project a year later.

The firm’s Marsa Alam portfolio also includes the engineering, procurement and construction of a 16MW extension to the Marsa Alam power station, which was completed in 2006. It also includes a chiller plant housing the cooling equipment required to meet the demand for air-conditioning in the area.


A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications