- Steve Scott, CEO, Al Hassan Engineering
Al Hassan Engineering Co SAOG (AHEC) is a leading EPC contracting and construction company in Oman with a subsidiary 'Al Hassan Engineering Abu Dhabi LLC' in UAE, offering civil and structural, mechanical and piping, and electrical and instrumentation services. AHEC is the first Omani contracting company to be listed in Muscat Securities Market in 1998. The company has strong and unique references in key business sectors of oil and gas, petrochemicals and refineries; power generation, transmission and distribution; pipelines; civil construction and water or wastewater treatment. Steve Scott, CEO, Al Hassan Engineering, shares more on the company´s projects and what sets it apart from its competitors...
Kindly introduce us to some prominent contracts bagged in 2014?
In the EPC sector, we have Rabab Harweel Power Plant (RHPP) and HRSG Project for PDO. The scope of work under this contract includes complete work associated with the Rabab Power Station. In the non-EPC sector, we have bagged the Sohar Refinery Improvement Project (SRIP) for Daelim-Petrofac JV. AHEC is carrying out the construction and pre-commissioning of civil and underground piping works. We have also been awarded the Ghaba North Redevelopment Project for PDO; and in the UAE, we are executing the Rumaitha or Shanayel Phase-III project in Abu Dhabi, which is in the mobilisation stage.
Despite a 22 per cent increase in revenues, the company declared a full-year loss of OR1.4 million ($3.7 million)...
During 2014, the company incurred losses arising from cost associated with the extension of schedule of some projects and from provisions for delayed payment. However, as we go through 2015, we are taking a range of actions to address the recovery of monies relating to a number of these projects.
What are the current execution challenges faced by the company in Oman?
Few challenges that we are faced with includes:
The whole supply chain is a challenge in execution and we are currently taking action to strengthen our supply chain management.
For EPC projects, the need to have a stronger in-house engineering capability is a clear priority and we are currently developing plans in this regard.
Improving productivity and efficiency in construction through use of technology and improved work processes is also a challenge we face in order to ensure cost competitiveness.
An overriding challenge remains safe delivery of all of our projects and we continue to review and enhance our Health, Safety and Environment (HSE) practices.
What are your plans to move the company up the development curve from being a good construction contractor to a good EPC contractor?
We want to strike a balance between the higher risk, higher return type of business, which would be EPC, and the more traditional construction business that AHEC has been associated with over the years. While the company is an established EPC contractor, there is a need for continuous improvement and for us to strengthen our capability even more in the EPC sector. That said, we are looking at strategic partnerships for EPC execution where the combination will deliver an attractive commercial offer to the customer with reduced risk in execution. In terms of EPC opportunities, we are eyeing the power and oil and gas sectors.
What keeps the company ahead of its competitors?
There are a few reasons why AHEC is one of the leading EPC companies in Oman today. Along with our legacy, AHEC gives highest priority to HSE. Keeping this in mind, the company has executed a number of projects in the oil and gas, petrochemicals, power and water sectors without any lost time incidents (LTIs). We have been recognised, time and again, for our HSE milestones by both industry bodies as well as clients. Furthermore, the company continues to give high importance to employment of Omani nationals with around 1,000 employees and achievement of higher In Country Value (ICV).
From which sector does the company generate its maximum sales? Going forward, any expansion plans in the near future?
Approximately, 70 per cent of our current backlog in Oman is in the combination of power and oil and gas projects, with the balance in civil and water sectors. Further, in the near term, we are concentrating on strengthening our position in our current markets of Oman and the UAE. Despite the fact that Oman is more reliant on oil and gas sales for its income, we see greater opportunities in the home market.
Additionally, AHEC has a new improved fabrication, plant workshop and warehousing facility at the industrial area in Nizwa. The fabrication workshop has obtained ASME and NB certificates authorising the use of code stamps. The new facility is well poised to enhance safety, maximise space utilisation and ensure faster deliveries for our projects, and in the process, achieve greater competitive advantage.