Khansaheb Civil Engineering has reached its 80th anniversary in the local contracting market by taking conservative approach to growth, general Manager Steve Flint tells Construction Week
by Michael Fahy - Editor, Constructin Week Magazine
There are many claims that contractors can make about their size, reach, skills or resources, but none in the UAE can match Khansaheb Civil Engineering’s longevity.
The company is considerably older than the UAE itself, celebrating its 80th anniversary this year. It remains a family concern, having been founded by the uncle of current chairman Hussain Abdulrahman Khansaheb in 1935. Despite approaching 90 years of age, Hussain “still comes into the office nearly every day”, according to group general manager Steve Flint. Hussain’s two sons, Abdulaziz and Tariq, also work in the business alongside grandsons, Abdulrahman and Amer, and other members of the family.
However, since 1981 the firm has had a sizeable international partner. When this deal was first signed, this was another family-owned contractor, RM Douglas, but after a number of mergers it is now a huge plc offering construction and support services known as Interserve. It has sales of $4.3bn and a net profit of $129.4m. In the UAE, the family remain the major partners but Flint says that the partnership has shaped the business for the better. “This combination of local knowledge and experience with international construction management expertise – and all of the systems and procedures that go along with that – have made Khansaheb what it is today,” he says. It is also a sizeable operation, with more than 6,500 employees across its various divisions and group sales of around $550m (AED2bn). It also has an impressive list of past projects. It built Mall of the Emirates for Majid Al Futtaim Group in 2005 and added the Fashion Dome extension in 2010. It built the Raffles Hotel at Wafi City, Bab Al Shams resort, Al Badia Golf Club at Festival City and the huge Ducab industrial plant in Jebel Ali. More recently, it has been involved in the delivery of the fit-out of Dubai’s new Four Seasons hotel in Jumeirah and the Taj Hotel in Business Bay, Muraba Residence at Palm Jumeirah, won work to buid exhibition halls at Dubai World Trade Centre and it is back working on Mall of the Emirates for a third time, adding a new Fashion District and an upper tier that will generate a further 25,000m2 of gross leasable area. This has involved an investment of $272m (AED1bn) by client Majid Al Futtaim Group and is due to complete in mid-2015. “We’ve had seven tower cranes involved in constructing that,” Flint says. “It’s the most complex project I’ve worked on in my career. You have an existing live mall, one of the busiest in the country, and we are putting a new level on it.” Yet despite the challenges, Flint says the project is “going very well”.
The company has also recently completed a series of projects for government and semi-government clients, including an impressive new arch in front of Zabeel Palace, which was delivered for the Engineer’s Office at the end of 2014. “It’s a bit of a special project to be involved with,” Flint says, before adding that there were again challenges that the firm has had to overcome to deliver it. “The timeframe for doing the job was very restricted. To take the existing entrance down and build a new one, we had four months. Everything was manufactured and fabricated off-site and then brought in and assembled. But the standard of design and the quality of finish was exceptional. We had a letter of appreciation for a job well done from the Engineer’s Office.”
The company also delivered a new headquarters for the Engineer’s Office, which is shared with Meraas Holding, on a site just off Sheikh Zayed Road, as well as Meraas Holding’s flagship The Beach project at Jumeirah Beach Residences. Flint says that the reason the firm has been picked for such work is that it has built strong levels of trust with customers. “The most important thing for the family… If I go to have a conversation with the chairman, the first thing he asks about is our customers. We have a nucleus of long term relationships with customers who keep coming back to us. We’ve been very selective about that over the years – we work for people who trust us and who we can trust. “Take people like Meraas. We’ve worked with Meraas for years in one form or another. That’s why they trusted us with The Beach. That development, I think, has been a fabulous success. It’s very well received by the public and they have done well out of it. If you go down there on an evening, it’s absolutely full.” He argues that these relationships helped to see the firm through the most recent recession. “As a company, we didn’t hit the highs in the boom. We are conservative, we are quite prudent about the way we do things. “The most important thing is that we have the capacity to deliver. If we want to grow the business, we’ve got to be modest. So what we haven’t done is doubled our workforce and then halved it.”
The other mitigating factor has been the breadth of its service offerings, Flint says Khansaheb has three main trading companies. The biggest is the construction arm, which itself has a number of divisions offering general contracting, road and infrastructure services, building services/MEP, fit-out contracting, a joinery workshop, an architectural and structural metalwork division, a property services arm specialising in smaller refurbishment and extension works and a sustainability division that also sells a wastewater treatment system developed in Canada known as Bionest. It also has a plant division with over 1,200 pieces of machinery solely for the company’s own use. The other two trading companies are a facilities management business and an oil & gas contractor called Khansaheb Hussain that has been in business for 44 years. The latter, based in Buhasa in the western region of Abu Dhabi, employs around 500 staff serving national oil firms and EPC contractors. It has a self-contained workshop, offices and accommodation, but also offers manpower services to clients. In total, its camp has the capacity to hold around 1,000 staff.
The influence of Khansaheb’s international partner is probably most notable in terms of its systems and processes. Interserve, for instance, has an initiative known as SustainAbilities, which promotes sustainable growth, positive environmental impacts and the development of skills among its goals. Although these policies have been created in mature markets, they appear to be working just as well in the UAE. In terms of sustainability, for instance, the firm has taken a methodical approach to reducing waste, and in particular cutting fuel consumption. “The carbon footprint for the business is huge – and that’s largely due to diesel and petrol consumption. We’ve been very proactive about reducing the amount of vehicles we have on the road, and we’ve brought our diesel consumption down by 50% in the last four years. Last year, we reduced our fuel bill by AED10m.”
Construction week - SF-5Similarly, with health and safety it has brought in a five-star ‘K’ rating system for projects, as well as improved monitoring and reporting systems. “All contractors, no matter who you are, will have near misses. We are proactively reporting that information. “Last year, we had 6,500 near misses and 10,000 unsafe incidents. Some people might think that’s horrendous. I think it’s great. What we’re doing is preventing accidents. We have our people reporting where good practice isn’t going on and it enables us to get the message out that this is not acceptable. “We’re very, very proud of our health and safety record,” he adds. Last year, for instance, the firm targeted an accident frequency measure of 0.4 incidents per thousand man-hours worked, but managed to reduce this to 0.32 incidents.
Moreover, in March 2014 it opened a Khansaheb Training School in Jebel Ali which has already put around 2,000 workers through courses to improve skills. They are placed into gangs of 10 with a chargehand and undergo 10-day courses in different skillsets including steel fixing, carpentry and masonry, taught by tutors who have all qualified with the UK’s Construction Industry Training Board. Frontline supervisors such as foremen and engineers go through separate five-day programmes that include skills such as programme management and man management. “It’s an ongoing thing. We’re going to do it year in, year out,” he said. “A very important by-product of this, I think, is self-esteem. People take pride in what they’re doing.”
Looking ahead, Flint doesn’t share the concerns that some contracting chiefs have expressed about the UAE market and the potential for projects to be postponed or cancelled due to lower oil prices. In fact, with the Expo 2020 on the horizon, he believes there will be plenty to do in Dubai. “I think the leadership in the UAE is absolutely visionary. And they have a habit of achieving. So some projects may look a little outlandish, but if you go to Dubai World Central an incredible amount of work is being undertaken there. If you look at the Expo 2020 site – the site work itself is fairly substantial, but it’s everything else that’s going on in Dubai around that, because there is absolutely no doubt that they [the leaders] will want Dubai to look its very best.” He points to the Dubai Canal project as an example, and the swathes of new waterfront property opportunities the project will create.
“We’re very well placed as an organisation to deliver hospitality, leisure and retail into the marketplace and support the vision of the leadership. If you think about it, that’s what we’ve been doing for years – helping to develop the UAE.”