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Kuwait Report
Marcopolis presents the Kuwait Report focused on the investments, doing business, economy and other topics featuring interviews with Kuwaiti leaders. The sectors under review in this issue are industry, oil and gas sector, investments, banking sector, telecom sector and many more.
InterviewsMarch 20, 2017
Kuwait's Leading Contracting Company is Executing Major Projects in Oil and Gas
Jad H. Mekkaoui, Business Development & Contracts Manager of Al-Kazemi Group
- Written by Dominika Bzduchova
- Published: March 20, 2017
Jad H. Mekkaoui, Business Development & Contracts Manager of Al-Kazemi Group
Interview with Jad H. Mekkaoui, Business Development & Contracts Manager of Al-Kazemi Group
Can you give us an overview of Al-Kazemi Group and the companies within the group?
Al Kazemi Group is a family owned company established in the 1940’s by the late Chairman Mr. Abdullatif Al Kazemi. The President & CEO of Al Kazemi Group is Dr. Tarek Al Kazemi and VP & DCEO is Mr. Ali Al Kazemi.
The Group has gradually expanded over the years and currently includes 22 different companies specialized in various business activities.
What are the major sectors?
These companies fall under four main divisions; the trading and contracting division, the shipping and logistics division, travel and tourism division and investments division covering real estate and hospitality businesses. With regards to the trading and contracting division, we are agents of international EPC contractors, manufacturers and service providers on exclusive basis in the Kuwaiti market. For example with the EPC contractors we undertake major scale projects in the oil and gas sector as well as in the infrastructure sector and the construction sector among other sectors. With the manufacturers, we introduce their product into the market to supply them to the end user whether it is to the Ministries, Government entities, local contractors or international contractors executing projects in the market. If you look at the scope of our projects, we currently have over 3 billion US dollars’ worth of ongoing projects mainly focused in the oil and gas sector including two projects with KNPC, the Clean Fuels Project, the Mina al-Ahmadi refinery package, which we are executing with our principal GS E&C, along with JGC and SK E&C as part of the consortium. Our scope from this project is amounting to 1.5 billion US dollars. There is the North LPG Tanks Farm with KNPC as well which is a half a billion dollar project. We have three other projects running with KOC as well totalling around 1 billion US dollars with the latest awarded in September 2015 pertaining to the building of a New Water Center in North Kuwait valued at 300 Million US Dollars. We are undertaking a road engineering project with the Ministry of Public Works, shutdown projects for EQUATE Petrochemical Company; maintenance contracts etc. so it is quite diversified. These projects are executed in collaboration with our international principals. To go into the shipping and logistics division, we offer a wide range of services such as but not limited to project logistics services, transportation, custom clearance; we are agents of international shipping lines, and are considered among the top shipping companies in Kuwait and have been for many years. We were recently awarded the project logistics for the CFP project which we are executing with our Saudi partners Al Majdouie Logistics Company with whom we formed a joint venture here in Kuwait which is Al-Kazemi and Al Majdouie Cargo transportation Company back in 2010. In terms of the travel and tourism division, we operate one of the most prominent travel agencies in the market offering turnkey travel services. We are also general sales agents of renowned airlines. We currently represent Azerbaijan Airlines, Pakistani International Airlines, and Saudi Airlines Cargo, among others. The investments division, is focused on hospitality and real estate businesses, we have our own properties and we deal in real estate buying and selling as well as offering consultancy services. When it comes to hospitality we have our own hotel, the New Park Hotel and several other hotel ventures, however not in a managerial capacity but in a shareholding capacity in Kuwait and abroad. That should give you a brief overview of the group in general.
How would you summarise the core values of the group? You have been in the market for 77 years I believe.
We have been in the market since the early 1940s.
The core values of our group are integrity and ethics in carrying out our tasks, responsibility in upholding the highest standards in the services provided to our principals to further and protect their interests, commitment to growth allowing us to succeed through our diversified industries, where our employees, principals, partners, and clients alike are able to flourish and accordingly develop based on our commitment to ourselves and to them as well as ensuring absolute quality of the services and products we provide. These core values have been instilled in every employee of Al Kazemi Group through the guidance of our President & CEO Dr. Tarek Al Kazemi and Vice-President & Deputy CEO Mr. Ali Al Kazemi.
What is your strategy for 2017?
Our strategy for 2017 would be to pursue major scale projects in sectors of interest, so we are mainly looking at projects in the oil and gas sector, in the infrastructure sector but also in the maintenance and shutdown sector. There are many projects that will be released during this year; we are looking at the main Jurassic production facility with Kuwait Oil Company (KOC), the local marketing depot at South Mutlaa with Kuwait National Petroleum Company (KNPC), maintenance contracts to be released through KNPC and KOC, as well as road projects, construction projects, and hospitals projects with MPW. It is worthwhile to highlight that our aim is to target every year as many projects of interest as possible with the hope of securing them of course. The strategy for the shipping division would be to bid for the project logistics contracts of all the large scale projects that are either awarded in the latter portions of 2016 or that will be awarded during 2017. It is quite a hefty requirement when you think about it because these are big contracts and so when you talk about a 2 billion or 3 billion US dollar project, the logistics scope is massive thus these are very much of interest to us. We have the capacity and the setup and the requirements to tackle such projects.
When you talk about a 2 billion or 3 billion US dollar project, the logistics scope is massive thus these are very much of interest to us. We have the capacity and the setup and the requirements to tackle such projects.
You took part in the Clean Fuels Project. Can you discuss the latter or any other project that you think is of great significance to Kuwait and that you are really proud of?
If you look at Kuwait and the market in general in the last 3 years you can distinguish three major projects that were tendered and awarded and that are in the execution phase. There was the Clean Fuels Project which was awarded to three different consortiums in 2014. There was the New Refinery Project which was released in 5 packages and awarded in 2015 and then there was the LNGI Import Facility Project. These 3 projects in my opinion are the biggest in the market in terms of value and significance to the oil and gas sector. The Clean Fuels Project’s target is to improve the quality of the oil that is produced in Kuwait and the revamping of the current refineries Mina Al Abdullah and Mina Al Ahmadi. Three consortiums are executing this project, including our consortium comprised of JGSK, JGC Japan, SK E&C and GS E&C, undertaking Mina Al Ahmadi package. The New Refinery Project which is also a very significant project as it’s going to be replacing the Shuaiba refinery once it is complete as the latter will be shut down. It will have a production capacity of 615 thousand barrels per day. It is a massive project valued at 4 to 5 billion KD. Then there is the LNGI Import Facility which is a new development for Kuwait and a big improvement when it comes to the gas sector. It is a USD 2.9 billion project which was awarded at the end of 2016. These are the biggest projects that are now being run under Kuwait National Petroleum Company (KNPC) and Kuwait Integrated Petrochemical Industries Company (KIPIC). These will bring a significant improvement to the oil and gas sector of Kuwait in terms of its production capacity and opening up new markets for the export of oil that is produced in Kuwait and it will allow to serve the increasing needs of the local market. These are the main projects that come to mind.
How did you help in these projects?
We are undertaking the CFP Mina Al Ahmadi Package project valued at around 4 billion US dollars. We have a stake in this project, we were awarded the Package in April 2014 and this is our implication. We did bid for the NRP and LNGI projects of course but unfortunately we could not secure them. We came in second lowest for the LNGI imports facility project and we came in second lowest for the NRP Package V which was of interest to us. The CFP project is of great significance as it is one of the biggest projects in the oil and gas sector and we are part of it. This is our role. All of these projects will serve Kuwait’s strategy which is ultimately to reach 4 million barrels of oil production per day by 2020. The aim of all these projects is to achieve this target. There are some delays of course, no projects are spared from delays or operational delays but things are moving steadily and project tenders will keep on coming in the upcoming years to achieve Kuwait Petroleum Corporation’s (KPC) strategy of reaching 4 million barrels of production per day by 2020. We have many projects running but we are proud to have a portion of the CFP project.
Among the four different divisions that you have, which one do you want to push and develop more?
It is like you are asking which one of your kids do you love more?! There is no straight answer to that question as we are aiming to improve and expand each division. We have experienced and highly qualified teams managing each division and which carry the operation of each division. Our target is to expand all divisions and if we can succeed in doing that simultaneously that will be the ultimate target. Of course there are challenges that we face and each division presents different challenges. However, what matters most is to overcome these challenges as a team to achieve our business goals.
How do you project yourselves in 3 years’ time if everything goes well? What would you have liked to have achieved?
The goal we always have and which is entrenched in our mind-set as employees of Al-Kazemi Group is to tackle every opportunity that is available to us. When you talk about a 3 year vision our target would be to secure more projects in the oil and gas sector because that’s our main ball game as well as securing more projects in infrastructure and expanding when it comes to maintenance contracts, which is of great interest to us. If you look at all of these big contracts that are being executed and that will be finalised in the upcoming years, these plants and refineries will need to be maintained and thus maintenance contracts will constitute a big opportunity and will occupy a big share of the market. When you look at the shipping division our aim is to continue the success we had in recent years and to secure more project logistics contracts for all of these projects that are being awarded in the local market across all sectors. For the travel division our target is to sign more airlines and expand the travel division’s scope. When it comes to the hospitality sector we are planning to build a new hotel. The plans are expected to start within the next 2 years. This is in a nutshell how we perceive the coming 3 years.
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