meed-logo

line1 line2 line3
SIGN IN / REGISTER

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.

This article has been unlocked to allow non-subscribers to sample MEED’s content. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s business intelligence, subscribe here

https://image.digitalinsightresearch.in/uploads/NewsArticle/10378440/main4841.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • PIF firm appoints Jeddah mixed-use project contractor

    23 April 2025

    Saudi Real Estate Company (Al-Akaria), backed by Saudi Arabia’s Public Investment Fund (PIF), has appointed its subsidiary firm, Tamear, as the main contractor for its Porta Jeddah project.

    The mixed-use development will have a built-up area of about 123,000 square metres. The project includes the construction of a four-star hotel, an office building, two retail and food and beverage buildings, a leisure and cinema building, open areas and other associated infrastructure.

    It is located within the Al-Nahda district of Jeddah. 

    London-headquartered architectural firm Chapman Taylor is the project architect. 

    Jeddah-based Burouj Engineering Consultant is the project consultant.

    MEED reported in March that Al-Akaria was preparing to award the contract to build its Porta Jeddah project.

    In its 2024 financial statement released on 19 March, Al-Akaria said it was preparing to award contracts for projects including the Porta Jeddah mixed-use development in Jeddah and the Al-Narjis office project in Riyadh.

    In March last year, MEED exclusively reported that Al-Akaria had issued the main contract tender inviting firms to bid.

    Prior to that, in June 2023, Al-Akaria signed an agreement with US-based hotel operator Hilton to operate and manage the Canopy by Hilton hotel within the Porta Jeddah development.

    The property will have 183 keys and will include 55 serviced apartments, several retail outlets, meeting spaces and leisure and sports facilities.

    GlobalData expects the Saudi construction industry to record an annual average growth rate of 5.2% in 2025-28, supported by investments in transport, electricity, housing and tourism infrastructure projects, as well as the $850bn-plus gigaprojects programme.

    The commercial construction sector is estimated to grow by 3.9% in real terms in 2024 and register an annual average growth of 3.6% in 2025-28, supported by the government’s plan to boost tourism, coupled with the construction of hotels, stadiums and data centres.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13739826/main.jpg
    Yasir Iqbal
  • Transformers market to reach $89bn by 2030

    23 April 2025

    The global transformers market is on a strong growth trajectory, projected to reach $89.34bn in 2030, driven by rising electricity demand, renewable integration, and grid modernization, according to a recent report by GlobalData.

    The Asia-Pacific (Apac) region is set to lead the charge with robust investments, while the Europe, Middle East, and Africa (Emea) region is poised to grow fastest, fueled by infrastructure upgrades and power sector reforms across developing economies in the Middle East and Africa, reveals GlobalData, a leading data and analytics company.

    “The global transformers market is witnessing substantial growth, fueled by an escalating demand for electricity, a definitive transition to renewable energy sources, and the imperative to modernise aging grid infrastructures," notes Bhavana Sri Pullagura, senior power analyst at GlobalData.

    Technological innovations, the evolution of market standards, and the burgeoning economic strength of developing nations further support this growth trajectory.

    GlobalData’s report, “Transformers Market Size, Share and Trends Analysis by Technology, Installed Capacity, Generation, Key Players and Forecast to 2030,” reveals that the global market for power transformers is projected to reach $35.83bn, while the distribution transformers market is anticipated to attain $53.51bn in 2030.

    The Asia Pacific power transformers market is set to grow from $12.35bn in 2024 to $18.96bn in 2030. 

    “National electrification programs, expanding renewable energy portfolios, market reforms, and the substantial industrial bases in China and India are poised to contribute to the new infrastructure development, thereby bolstering the regional market," explains Pullagura.

    With the demand for power set to increase in the Middle East and Africa, the Emea is estimated to be the fastest growing region, with a compounded average growth rate (CAGR) of 7.7%, over the forecast period.

    Distribution transformers market

    The Apac region is projected to be the largest distribution transformers market, with an anticipated value of $32.51bn in 2030. The diverse market conditions within the Emea region suggest that more established European markets, such as Germany and the UK, will prioritise the replacement of aging infrastructure to ensure continued reliability.

    Conversely, countries in Africa and the Middle East are expected to demonstrate significant demand for distribution transformers, spurred by the ongoing power sector reforms.

    The growth in the Emea is likely to be at a CAGR of 9.1% and the Americas market is estimated to grow at a CAGR of 6.9% over the forecast period.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13739782/main.gif
    MEED Editorial
  • Saudi Arabia holds high-level nuclear talks

    23 April 2025

     

    Riyadh has initiated bilateral discussions with several countries with nuclear technology providers that have been invited to bid for a contract to develop Saudi Arabia’s first large-scale nuclear power plant project.

    “One-one, government-to-government discussions and meetings are being held or scheduled,” a source familiar with the project tells MEED.

    The Chinese, South Korean, French and Russian nuclear contractors are understood to be among those keen to pursue the project, which has been in the planning stage since the mid-2010s.

    Saudi Arabia restarted procurement proceedings for its first large-scale nuclear power plant project in Duwaiheen in 2022.

    MEED previously reported that the companies that have been invited and are expected to bid for the contract include:

    • China National Nuclear Corporation (CNNC, China)
    • Korea Electric Power Corporation (Kepco, South Korea)
    • Rosatom (Russia) 
    • EDF Group (France)

    The project client, Saudi Arabia’s King Abdullah City for Atomic and Renewable Energy (KA-Care), has set and extended the bid submission deadlines several times since 2022.

    According to the source, the bid deadline is “more like a moving target, running in parallel with the progress in the bilateral government-to-government talks”.

    The ongoing conflict between Israel, Gaza and other neighbouring countries appears to be a major contributing factor in the extended procurement timeline of the Duwaiheen nuclear plant project. Some sources allude that the project will likely feature in US President Trump’s expected visit to Riyadh over the coming weeks.

    It is understood that Riyadh is using its nuclear power plant project, along with its plan to enrich uranium sources as part of its industrial strategy, as a bargaining chip with the US government. The White House is pushing for the normalisation of relations between Israel and Saudi Arabia and is opposed to uranium enrichment.

    2.8GW project

    The Duwaiheen nuclear power plant is expected to be procured using a traditional design-and-build model. 

    In September 2016, MEED reported that Saudi Arabia was carrying out technical and economic feasibility studies for the first reactors and was also considering possible locations for the kingdom’s first nuclear project, a 2.8GW facility.

    A site at Khor Duwaiheen, on the coast near the UAE and Qatari borders, was subsequently chosen for the first project.

    In March 2022, Saudi Arabia announced the establishment of a holding company – understood to be the Duwaiheen Nuclear Energy Company – to develop nuclear power projects in the country to produce electricity, desalinate seawater and support thermal energy applications.

    Duwaiheen Nuclear Energy Company received three bids for the project management consultancy package for the nuclear plant project in 2023.

    MEED understands that the following companies submitted proposals for the contract:

    • Atkins (UK/Canada)
    • Worley (Australia)
    • Assystems (France)

    Two of the three bidders have had previous engagements with the Saudi nuclear energy project. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13738776/main.jpg
    Jennifer Aguinaldo
  • Trump’s new world order

    23 April 2025

    Commentary
    Edmund O’Sullivan
    Former editor of MEED

    Of all the things US President Donald Trump has done since returning to the White House, nothing offends economists more than higher tariffs.

    But through history, most US presidents loved customs duties. Before 1913, there was no federal personal income tax and more than 90% of US government revenue came from taxing imports. Tariffs also protected America’s infant industries and laid the foundations for the US to become the world’s leading industrial power. Germany was persuaded in the late 19th century that it should follow America’s lead.

    By then, Britain was the only major economy where free trade was enthusiastically supported. Making imports duty free allowed its manufacturing industries to import cheap raw materials and kept down the price of food. But it too became protectionist in response to the Great Depression, which started in 1929.

    After the Second World War, Washington concluded the depression lasted so long because of beggar-my-neighbour trade policies. It championed the General Agreement on Tariffs and Trade (GATT), launched in 1947, to cut customs duties on a multilateral basis.

    But the idea that a low-tariff world was unambiguously good only emerged following the end of Soviet Communism in 1991. One of the greatest barriers to a global free market had disappeared. The World Trade Organisation (WTO), which replaced the GATT in 1995, made tariff agreements legally enforceable. The WTO is perhaps the highest expression of the global free trade dream.

    And yet policymakers remained sceptical. The EU has trimmed duties – they average around 5% – but not abolished them. And there are other ways of discouraging imports: manufacturing standards including sustainability criteria, state finance and hidden subsidies.

    China has not become the world’s leading exporter because of the invisible hand of the market. Trump says it is cheating, and he has a point. Saudi Arabia is the Middle East’s leading exporter of manufactured goods as a result of cheap petroleum feedstock and finance to promote fertiliser and petrochemicals production.

    Trump’s solution 

    There is a lesson in all this: economics is not a science, and any leader who treats it as such will fail. And Trump is not the first modern US president to reject its dogma. Under President Joe Biden, Washington’s budget deficit and debt soared. That is something Trump says he was elected to remedy. Tariffs are part of his solution.

    The global trade system invariably echoes geopolitical realities. Britain loved free trade because it made its empire the most extensive in history. The post-1945 economic system facilitated America’s economic dominance of the western hemisphere. The WTO made sense in a unipolar world.

    Trump’s tariffs tell us globalism is now dead and multipolarity has arrived for us all.

    Connect with Edmund O’Sullivan on X

    More from Edmund O’Sullivan:

    > Is this the end for Middle East studies?
    > Trump’s foreign policy shakes global relations
    > Between the extremes as spring approaches
    > A leap into the unknown
    > Middle East faces a reckoning
    > Biden leaves a mixed legacy
    > Desperate days drag on
    > The beginning of the end
    > The death of political risk
    > Italy at centre of new reduced Europe

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13713621/main.jpg
    Edmund O’Sullivan
  • Du and Microsoft sign $544m hyperscale deal

    23 April 2025

    Register for MEED’s 14-day trial access 

    Dubai-based Emirates Integrated Telecommunications Company (Du) has signed a deal to build a AED2bn ($544m) hyperscale data centre in Dubai in partnership with US-headquartered Microsoft.

    The US tech firm will be the data centre’s anchor or main tenant.

    Dubai Crown Prince Hamdan Bin Mohammed Bin Rashid Al-Maktoum witnessed the signing of the deal during the Dubai AI Week and announced it on social media on 22 April.

    He said the announcement reinforces “Dubai’s leadership in adopting the latest technologies, innovations and digital services”.

    Hyperscale data centres are large, often distributed facilities designed for large-scale workloads. They typically comprise thousands of servers and miles of connection equipment to foster high redundancy.

    The Du and Microsoft hyperscale data centre will be built and operated at a cost of around AED2bn.

    MEED understands that the data centre’s capacity will be delivered in tranches.

    Du operates five data centres across the UAE, including three in Dubai and two in Abu Dhabi.

    According to MEED Projects data, as of April, an estimated $12bn-worth of data centre construction projects across the GCC are in the planning stage, in addition to over $820m under bid and $7bn under construction.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13738739/main5314.jpeg
    Jennifer Aguinaldo