THROUGH its recent acquisition of International Centre for Contracting Company (ICC), Drake & Scull International (DSI) says it has reinforced its position as the leading regional provider of integrated end-to-end contracting services with a clear focus on growth in the Saudi market.

The company has seen remarkable progress in the kingdom, crowning its success in the country this year with its biggest project to date – the iconic King Abdullah Petroleum Studies and Research Centre (Kapsarc) worth $545 million, Saleh Muradweij, the managing director of Drake & Scull Construction (DSC), tells Gulf Construction (see separate project report).

This follows major wins in Saudi Arabia last year including the civil works on the Al Jawharah Tower – worth $123 million (see separate project report) – and the mechanical, electrical and plumbing (MEP) works and the district cooling plant for the Information Technology and Communication Complex (ITCC) project, amounting to $123 million.

Regionally, the company also secured a string of consecutive contracts in the first quarter of this year in Oman and Egypt, in addition to Saudi Arabia, worth a combined $713 million.

DSI’s current order book for Saudi Arabia is valued at a total of around $1.09 billion and it presently has three subsidiaries targeting civil, MEP and water and power projects in the kingdom.

Since 1979 DSI has been providing world-class end-to-end MEP engineering services to a broad range of commercial, industrial and institutional customers in Saudi Arabia.

DSI organically started in 2010 in Saudi Arabia through its wholly-owned subsidiary Drake & Scull Construction. “We then continued our expansion plan by acquiring 65 per cent of Drake & Scull International Saudi (in 2010) and establishing the water and power arm,” says Muradweij. Having acquired a 100 per cent stake of ICC for an enterprise value of SR128 million ($34.13 million), DSI has further strengthened its capability and resources in Saudi Arabia.

ICC is a Grade One classified prominent contractor based in Riyadh with offices across the kingdom in Jeddah and Dammam. The company has a healthy backlog at $218 million as of December 2010. Under the terms of the deal, ICC will be consolidated under Drake & Scull Construction (DSC KSA), a wholly-owned civil contracting subsidiary of DSI.

ITCC ... DSC is carrying out the MEP works and the district cooling plant for the project.

 “With the completion of this latest acquisition, DSI has reached the milestones it set to achieve since its listing in 2009.The strategies conceived at the end of 2008 have been highly successful despite the uncertainties and challenges the construction industry has faced.

“The acquisition of ICC reinforces our position as the leading regional provider of integrated end-to-end contracting services with a clear focus on growth in the Saudi market. We are delighted to have the resources – both human and technical – on the ground that will allow us to service several prestigious projects and target prominent clients in this promising and lucrative market,” comments Muradweij.

The company is now looking at consolidating its presence and build on the strength of its resources in the market. “DSI’s strategy for the coming year is to capitalise on its know-how, bid for more projects and hopefully increase our backlog and market share in the region,” Muradweij adds.

The company is highly optimistic about prospects in the Saudi market, given the impetus provided by the public sector. “Saudi Arabia has recently announced a SR580 billion ($158 billion) national budget, which is the largest state expenditure to date, dedicated to revolutionising the education, healthcare, and infrastructure sectors. Also, the massive population of the country stimulates substantial demand for residential units and will further fuel growth.

“The long-awaited mortgage law will allow public investors to assume greater roles in public and private investments in the country. Also, the increase in oil prices will enhance liquidity in the short run and will facilitate and accelerate the funding and the award of the planned mega projects. The Saudi Arabian government is initiating new projects on a day-to-day basis and DSI is taking advantage of the market size and its operations to gain market share,” he says.

Muradweij points out that DSI has witnessed outstanding success over the past year and has managed to grow its backlog from $898 million in January 2010 to $2.29 billion to date. “We are on track with our growth strategy and will continue to aggressively bid in new markets and diversify,” he adds.

DSI is a regional market leader delivering world-class quality projects via end-to-end solutions that providing integrated design, engineering and construction disciplines of MEP, civil contracting, and water and power infrastructure.

DSI established its first office in Abu Dhabi in 1966, and has since expanded operations to encompass offices in Dubai, Egypt, Kuwait, Libya, Oman, Saudi Arabia, Syria, Qatar, Jordan and Thailand, as well as managing projects in Europe and other parts of North Africa

Its main business streams include Drake & Scull International, which serves as the MEP arm, DSC, which is the general civil contracting unit and Drake and Scull Water & Power (DSWP), which focuses on the water and power and infrastructure sector.

In 2008, DSI offered 55 per cent of its shares to the public and the IPO was oversubscribed 101 times. Ernst & Young ranked the IPO among the top 20 global IPOs in 2008. Since then, it used the funds to integrate, establish and acquire businesses that complement its corporate strategy of expansion into new markets, via organic and inorganic growth.

The fully-integrated management systems, certified to ISO 9001:2008, ISO 14001:2005 and OSHAS 18001:2007 standards, are compliant with leading building, health and safety regulations, as well as sound environmental and energy management procedures.

DSI has established a regional leadership position over 44 years of successfully completing the most complex projects on time, within budgets and matching set quality parameters. It has completed many prestigious projects in the region over the past four decades, and has helped shape the region’s skyline from within.