ACC leverages expertise to tap new markets
23 November 2022
The UK government announced in October that it will provide funding support for the construction of 10 modern office buildings for a ministerial city in Benin’s largest city Cotonou.
The firm leading the construction is Arabian Construction Company (ACC), and the West African project is the latest example of how the Abu Dhabi-headquartered contractor has used the experience it has developed in the UAE and the Middle East to become an international construction company operating across multiple countries and continents.
ACC was founded in Lebanon in 1967 and early in its history set up a base in Abu Dhabi. From there, it grew to become one of the Middle East’s leading construction companies, offering a range of services to its clients.
“We cover almost every aspect of the construction sector, although we are better known, and receive more attention, for high-rise and the more complex type of buildings,” says Maher Merehbi, ACC’s CEO.
“Among the more recent examples of our flagship projects are Sky View and Address Fountain Views in Downtown Dubai, and the Central Market towers, and Etihad Towers in Abu Dhabi.”
As the UAE has developed over the past 50 years, ACC has had the opportunity to work on a wide range of projects. “The UAE has offered a tremendous diversity of work,” says Merehbi.
“A strong recognition should be given to the standard and quality of projects the country has delivered over the past 20 or 30 years. As the UAE has been continuously evolving, this has contributed substantially to the expertise that we have acquired as we grew and evolved with it. Very few cities or countries can claim to have the same quality projects.”
ACC is leading the construction of office buildings for a project in Benin
Building expertise
Developing project and construction management expertise have been key factors in ACC’s success.
“When you run such complex projects, project management and construction management are the essential tools for successful delivery,” says Merhebi.
“As projects grew in complexity and in size, we developed enhanced and more advanced construction management and project management techniques that allow us to maintain both quality and control.
“Control not only focuses on delivering on time, but delivering a high standard that maintains the projects’ performance to the expectations of the employer.”
In addition to traditional contracting, design-and-build contracts have been used as an alternative method of project delivery.
“This is an avenue we have tackled, and we have executed several projects on that model,” says Merhebi.
“Design-and-build is one of the better ways of delivering projects if you wish to do away with the traditional problems of design and specifications modifications or incomplete or misadapted designs. While it relieves the employer from certain risks, it allows the contractor a certain degree of flexibility on the construction methodologies, but it also allocates more responsibility to the contractor.”
ACC has also taken the design-and-build model a step further by becoming a co-developer in some projects.
“Seasoned developers appreciate that early involvement of the contractor, and the design-build approach, protect the employer from certain risks. This has opened up interesting opportunities where we will take a stake in the equity, and that allows the interests of the contractor and developer to be truly aligned,” says Merehbi.
“Partnering is a little bit unbalanced when all the parties involved do not have an aligned objective. For example, the employer stands to gain from reducing payments to the contractor while the contractor gains from an increase in project payments.
“Clearly such a situation establishes limitations on the partnering concept. For better alignment of interests between the employer and contractor, the contractor’s role extends beyond merely providing construction services. The contractor is more involved and has a larger contribution to the project.”
Tapping new markets
Outside Lebanon and the UAE, ACC expanded across the region in the 1970s and has worked in most Middle Eastern markets.
“With high oil prices, the economies were growing fast and there was a lot of demand in the market. For ACC, the economic boom in the region meant expansion was the natural avenue,” says Maher.
Moving into new markets showed that even neighbouring countries with similar economic drivers can be quite different when it comes to contracting.
“Every market is unique in its own way. You have to recognise that there are market variances in the way business is carried out, distinctive cultures and customs, and the way the supply chain works is also different. A contractor has to recognise these differences very quickly and adapt. Often contractors enter a market without the willingness or the ability to conform and integrate,” says Merehbi.
ACC has expanded from the Middle East, establishing a strong base in Egypt, and also into South Asia with work in Pakistan in the 1990s, and then in India in the 2010s. The firm also took steps to enter the European market with work in Cyprus and is now pursuing projects in Greece. ACC is also active in Africa with projects such as the ministerial complex in Benin.
Rather than entering new markets as a management contractor that relies on managing local contractors, for ACC, entering new markets is a major commitment that requires investment in local operations.
“Contracting carries a lot of risks. Relying on third parties to execute the majority of construction activity creates high uncertainties. We pay particular attention to the reputational impact of our projects and prefer to execute our own works,” says Merehbi.
“While there are undoubtedly reputable companies in various disciplines, executing through the project management methodology still leaves some exposure. So instead of managing someone else’s execution strategy, we would rather make our own and manage our own team.”
Self-performing is important in markets where supply chains do not cover the entire spectrum of services, such as in some African countries.
“ACC has fully deployed in Africa. We operate there as we do in any of our other markets. We go through the full process and cycle of hiring, training and monitoring. That is what being a contractor is about,” says Merehbi.
Financing is also a key element of winning work in Africa, although Merehbi says this is no different from other markets.
“Financing is a key element in every market,” he says. “In certain areas with a growing economy, funding is more easily available. In other areas, the contractor may be required to contribute to the funding.”
Instead of managing someone else’s execution strategy, we would rather make our own and manage our own team
Raising finance
Funding projects has become more challenging with rising interest rates, but Merehbi expects a mixed impact depending on the nature of the project.
“There are short- or medium-term projects that require early pay back and profit generation and then there are projects that are inherent to a country’s infrastructure and capture economic benefits over a longer period. Higher interest rates affect categories of projects differently,” he says.
“For example, if you are building a hospital that is state-run, then the government’s primary objective is to supply the medical services, and if it can afford it, then it will go ahead and do it. Commercial profit would not be the primary objective in this case. A private developer will probably take a different approach; if the funding becomes too expensive it may choose to postpone the project.”
As market dynamics change, selecting the right projects will remain critical. This is particularly important for ACC as the business, unlike many of its competitors, is still privately held.
“We are a family business. We are managing family assets. If the project makes commercial sense, we will go for it. We will take the risks that contractors are expected to take; it is part of the job, but we are not driven by accumulation of backlog for end-of-year reporting,” says Merehbi.
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Ongoing political turmoil in the region may be prompting Abu Dhabi to review its approach to key diplomatic issues, not least its relations with its larger neighbour, Saudi Arabia.
In late September, UAE Vice-President Sheikh Mansour Bin Zayed Al-Nahyan travelled to Riyadh for talks with Crown Prince Mohammed Bin Salman and Defence Minister Prince Khalid Bin Salman. Such visits may have been commonplace in the past, but over the past year they have been relatively rare, given the friction between the two Gulf powers over issues such as the conflict zones of Yemen and Sudan, relations with Israel and economic rivalry.
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The visit was a surprise, given the GCC states’ lack of unified action this year amid the crises in Yemen and Iran. Speaking at an event in Washington in mid-September, Bernard Haykel, professor of Near Eastern Studies at Princeton University, noted that: “Despite the fact that [the GCC states] all face a common threat in Iran and its proxies, you still don’t see real coordination between them. You still have these differences between the Saudis and the UAE, for instance; you have differences between the Qataris and the UAE. If anything would have united them, this would be it. And you don’t see that kind of unity.”
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Speaking at the UN General Assembly in New York on 28 September, Minister of State Khalifa Shaheen Al-Marar reviewed the crises in Iran, Sudan, Gaza, Ukraine and elsewhere and said “the importance of developing and reforming regional and international multilateral institutions … remains paramount” – but while he name-checked the UN, he did not mention the GCC.
It is also notable that the UAE has not yet joined either of the two security initiatives launched by Saudi Arabia during the summer: a maritime defence alliance designed to protect shipping in the Red Sea, or a mutual defence pact that Riyadh signed with Turkiye and Pakistan.
In his speech to the UN, Al-Marar listed what he saw as the main pillars of the UAE’s national strength: “strategic independence” was the first item in his list.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20435670/main.gif -
Abu Dhabi mends fences with Riyadh
9 October 2026
Ongoing political turmoil in the region may be prompting Abu Dhabi to review its approach to key diplomatic issues, not least its relations with its larger neighbour, Saudi Arabia.
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At the start of the year, the UAE retreated from Yemen under pressure from Riyadh, after the UAE-backed Southern Transitional Council made rapid territorial gains at the expense of Saudi-backed groups and advanced close to the kingdom’s southern border.
Since then, against the backdrop of the Iran war, relations have shown further signs of strain, with cross-border financial transactions reportedly being blocked or delayed.
However, there have been intermittent attempts to present a more collegial relationship, such as in July, when a photo emerged on social media of Sheikh Mansour and Prince Khalid posing with their arms around each other, reportedly while on holiday in Europe.
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It is also notable that Mansour’s delegation to Riyadh included several senior security officials, including Ali Bin Hammad Al-Shamsi, secretary general of the Supreme Council for National Security; Ali Saeed Matar Al-Neyadi, chairman of the National Emergency, Crisis and Disaster Management Authority; and Nasser Humaid Al-Nuaimi, secretary general of the Tawazun Council for Defence Enablement.
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Writing for the Arab Gulf States Institute in early October, Kristian Coates Ulrichsen, a Baker Institute fellow for the Middle East at Rice University, said Mansour’s visit to Riyadh in late September was “likely meant to signal that the thaw [in bilateral relations] was real” and “designed to enable a more coordinated approach to managing the forces ranged against the Houthis in southern and central Yemen”.
Further signs of warming ties came on 8 October, when UAE Investment Minister Mohamed Hassan Alsuwaidi signed a memorandum of understanding with Saudi Industry and Mineral Resources Minister Prince Abdulaziz Bin Salman covering power grid interconnections, trade in electricity and freight rail connectivity.
On the same day, the Saudi ambassador to the UAE invited President Sheikh Mohamed Bin Zayed Al-Nahyan to attend a GCC-EU Summit in Saudi Arabia later in the month.
Sheikh Mansour was not the only senior Emirati on diplomatic manoeuvres in recent weeks. The day after the vice-president was in Riyadh, national security adviser Sheikh Tahnoun Bin Zayed Al-Nahyan was in Muscat for talks with Sultan Haitham Bin Tariq Al-Said.
Oman is a critical partner for the UAE in several areas. Omani ports have provided a trade lifeline for Emirati importers and exporters at a time when ports in Dubai and Abu Dhabi have been sidelined by Iran’s threats against shipping through the Strait of Hormuz. Muscat’s approach of maintaining dialogue with all actors means it is also able to mediate with both Iran and Yemen’s Houthis.
Strategic independence
The flurry of diplomatic activity may be a sign of closer coordination between the UAE and its neighbours on some critical issues, but that does not necessarily herald a sea change in its approach.
Speaking at the UN General Assembly in New York on 28 September, Minister of State Khalifa Shaheen Al-Marar reviewed the crises in Iran, Sudan, Gaza, Ukraine and elsewhere and said “the importance of developing and reforming regional and international multilateral institutions … remains paramount” – but while he name-checked the UN, he did not mention the GCC.
It is also notable that the UAE has not yet joined either of the two security initiatives launched by Saudi Arabia during the summer: a maritime defence alliance designed to protect shipping in the Red Sea, or a mutual defence pact that Riyadh signed with Turkiye and Pakistan.
In his speech to the UN, Al-Marar listed what he saw as the main pillars of the UAE’s national strength: “strategic independence” was the first item in his list.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20432716/main.gif