{"id":4289,"date":"2016-02-10T21:38:28","date_gmt":"2016-02-10T14:38:28","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/?p=4289"},"modified":"2016-02-10T18:49:03","modified_gmt":"2016-02-10T11:49:03","slug":"saudi-contractor-al-khodari-to-reduce-reliance-on-public-sector-work","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-contractor-al-khodari-to-reduce-reliance-on-public-sector-work\/","title":{"rendered":"Saudi contractor Al Khodari to reduce reliance on public sector work"},"content":{"rendered":"


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\nThe Saudi Arabian contractor Abdullah A M Al Khodari & Sons (Al Khodari), whose value of government contracts fell by almost half last year, is targeting more private-sector work and deals in the GCC and Africa after cutting 8,000 jobs last year.The amount of new work won by the company fell to 1.5 billion Saudi riyals (Dh1.47bn) from 2.9bn riyals in 2014 while it cut 8,000 jobs last year.”We are going through volatility, as is any other business,” Kailash Sadangi, the chief financial officer, told The National after revealing the company’s new strategy to investors at the Saudi Arabia Equity Forum in Riyadh on Tuesday. “It is not just contractors,” he said.
\n“We have a clear strategy in place to counter what is happening in the marketplace. We are one of the preferred contractors [in Saudi Arabia], we have a peak contractor classification and we have a lot of competitive strengths.”The company had 19,000 staff at the start of 2015, but this fell to 11,000 by the end of the year. About 5,000 to 6,000 workers were laid off when projects came to an end and the remaining 2,000 to 3,000 were cut through a “lean” programme that involved stripping costs out of the business, including at head-office level, Mr Sadangi said. About 45 million riyals worth of costs were stripped out, the company said.
\nHe said that the benefit of its diversification strategy were already paying off. Al Khodari had earned 95 per cent of its revenue from government work. But Mr Sadangi said that this ratio had fallen to 72 per cent public and 23 per cent private sector by last year, after picking up a 637.5m riyal contract from the Saudi Arabian Mining Company, Ma’aden, for work at the US$9bn Waad Al Shamal phosphate complex in the north of the country.
\nWithin Saudi Arabia, the company is targeting other private-sector giants for work, such as Aramco, and is targeting consortia and joint ventures looking to deliver new metro and public transport projects. It is also trying to move into complementary areas such as alter\u00adnative energy, facilities management and building cap\u00adability to take part in the construction of PPP or IWPP projects, and looking to link with developers that are planning to work with the housing ministry to deliver much-needed new homes under a 250bn riyal housing programme announced by the late King Abdullah in 2013.
\n“Then we are also venturing into some new markets on a selective basis,” Mr Sadangi said. “[These are] mainly GCC and some African countries like Egypt and other places where we find good opportunities.”Conditions in Saudi Arabia have worsened for its construction sector as the government stopped awarding new contracts in late 2015 and cut spending allocated to transport and infrastructure in its 2016 budget by 63 per cent to 23bn riyals.
\nChris Seymour, the Middle East head of markets at the building consultancy Arcadis, said that “liquidity is predictably tight” in Saudi Arabia after more than 12 months of low oil prices. He said this offered opportunities for contractors looking to gain a foothold into the kingdom, which is still the GCC’s biggest construction market.”Alternative funding sources are an active area of development where contractors [who] can also bring funding to the table are prioritised.”
\nmfahy@thenational.aeFollow The National’s Business section on Twitter
\n
\nSource : thenational.ae
\nRead more…Saudi contractor Al Khodari to reduce reliance on public sector work<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Saudi Arabian contractor Abdullah A M Al Khodari & Sons (Al Khodari), whose...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-4289","post","type-post","status-publish","format-standard","hentry","category-property-news"],"jetpack_featured_media_url":"","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-17b","jetpack-related-posts":[{"id":21476,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabia-construction-market-has-dropped-80-per-cent-says-al-khodari-chief\/","url_meta":{"origin":4289,"position":0},"title":"Saudi Arabia construction market has dropped 80 per cent, says Al Khodari chief","date":"July 31, 2016","format":false,"excerpt":"\r The chief executive of Saudi Arabia's only publicly traded builder has estimated that the construction market in the kingdom has shrunk by as much as 80 per cent.Fawwaz Al Khodari, the head of Al Khodari & Sons, also revealed the contractor has avoided bidding on some government projects because\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":21470,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/saudi-arabia-construction-market-has-dropped-by-80-per-cent-says-al-khodari-chief\/","url_meta":{"origin":4289,"position":1},"title":"Saudi Arabia construction market has dropped by 80 per cent, says Al Khodari chief","date":"July 31, 2016","format":false,"excerpt":"\r Activity in Saudi Arabia's construction market has declined by about four-fifths, according to the head of one of the Kingdom's most prominent contracting groups.Fawwaz Al Khodari, the head of Saudi Arabia's only contracting firm whose shares are publicly traded, Al Khodari & Sons, told analysts in a call on\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":48692,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/light-at-end-of-tunnel-for-saudis-contractors-says-al-khodari\/","url_meta":{"origin":4289,"position":2},"title":"Light at end of tunnel for Saudi's contractors, says Al Khodari","date":"March 18, 2017","format":false,"excerpt":"\r Conditions in Saudi Arabia's contracting market are likely to improve this year but only in the second half, according to the head of a leading construction company in the kingdom.Fawwaz Al Khodari, the chief executive of Al Khodari & Sons, said that his company had experienced \"a very, very\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4160,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/contractors-feel-the-pinch-as-saudi-government-goes-slow-in-awarding-projects\/","url_meta":{"origin":4289,"position":3},"title":"Contractors feel the pinch as Saudi government goes slow in awarding projects","date":"February 9, 2016","format":false,"excerpt":"\r \r The value of new contracts won by the Saudi contractor Abdullah A M Al Khodari & Sons last year fell by nearly 50 per cent as \"government entities did not proceed with awards\" in the run-up to its 2016 budget announcement in December.The company, which is based in\u2026","rel":"","context":"In "Property 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Gulf contractors feel the squeeze","date":"June 28, 2016","format":false,"excerpt":"\r The region's listed contractors are expected to post another poor quarter of results as companies have to contend with a lack of new project awards, declining revenue and shrinking margins.An analysts' note from EFG Hermes says that company disclosures on contract wins show a 75 per cent year-on-year decline\u2026","rel":"","context":"In "Property 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