Drake & Scull International PJSC, a Dubai-based construction company, plans to bid for construction work on the Louvre museum in Abu Dhabi as the Persian Gulf emirate resumes work on suspended projects.
“We are trying to pre-qualify at the moment, we will be bidding,” Chief Executive Officer Khaldoun Tabari said in a phone interview March 29. “With the recent announcement in Abu Dhabi, things are back on track. Not as it used to be but a lot of projects are back.”
Abu Dhabi, home to one of the world’s biggest sovereign wealth funds, in January announced plans to restart real-estate projects including branches of the Louvre and Guggenheim museums after reviewing their viability for about two years. The global credit crisis caused a speculation-driven property boom to burst, forcing the sheikhdom to put on hold plans to transform itself into a business and cultural hub.
Drake & Scull, which sought refuge in Saudi Arabia’s booming construction market after the crash in Abu Dhabi and its neighbor Dubai, secured visas for 3,000 workers it plans to move to the kingdom in the next six months, Tabari said. The company already has 5,000 workers in Saudi Arabia, which is spending more than $500 billion on infrastructure and other projects, he said.
Drake & Scull expects to secure contracts valued at 2 billion dirhams ($545 million) in Saudi Arabia this year, Tabari said. The company has about 4 billion dirhams worth of work there currently, he said.
“We will see a 25 percent increase in revenue in 2012 and 50 percent of that will come from Saudi Arabia,” Tabari said. “We are bidding for a lot of projects in Saudi Arabia and in the second quarter we should hear the results of those bids.”
Drake & Scull posted a 36 percent increase in profit last year to 220 million dirhams and this month reported contract wins in Algeria and India. The shares have gained 31 percent this year after declining 24 percent last year.
Drake & Scull plans to approach banks as the company seeks financing for expansion, Tabari said. “These are opportunistic times where the interest rates are very low. We are trying to fix our borrowing,” he said. “I’m not sure how much money we need because we haven’t decided on any numbers. We are still talking about it.”