Leading From the Front

What were the key factors that helped Kuwait Portland Cement Company to win the airport tender?

Limak Holding shortlisted two companies that were capable of handling such a project. We were one of the companies, and the next step was to evaluate quality on the basis of concrete design mixes and the specification of the project. Based on the criteria, we created a suitable concrete design mix in our lab and did a mockup at the site under Limak’s supervision. Several features had to be monitored in that mockup, such as temperature of the concrete, strength, and workability. Limak brought in a specialized third party from Dubai to supervise the mockup, and after several analyses, our concrete design mix proved to be the best. Eventually, we had to compete on price, and although our competitor was aggressive and was willing to offer an extremely discounted price, we made up the difference with our quality. Limak had a clear idea of what it wanted, and for such a project, quality is not negotiable. It also considered our financial capability; we are a zero-debt company and have a strong financial situation, allowing us to have a large onsite production capacity. We have set up five batching plants on site with an average capacity of 700cbm per hour. The project resulted in huge demand and the Ministry of Public Works added pressure by asking us to accelerate the project. Nonetheless, we managed to cast the 570,000-cbm raft foundation in a record time of nine months. At present, the total quantity casted for the airport project is about 900,000cbm.

How have you maintained a stable share value since listing in 1995?

Kuwait Portland Cement’s Ready-Mix Division was established in 2006, though the cement company has been in the market since 1979. Our share price is mostly stable, because in the last five to six years, we have maintained the same level of profits based on the market situation. We have different sectors in our company; in the industrial sector, we have ready-mix, cement, steel, and our own financial portfolios such as shares in Kuwait Stock Exchange and GCC markets as well as bonds and estate. At present, the growth in the cement sector is slow but our growth in the ready-mix sector makes up for it. The recent project awarded to us helped in that sense. In addition to the airport project, we were awarded the runway and the airport traffic control tower. In addition, we won the tender for the maternity hospital and the Al Salmi highway.

What are your expectations for the year ahead?

Kuwait’s development plan was announced last year and there are many projects in the pipeline. Oil prices have a significant impact on the realization of projects and some megaprojects were delayed because of low oil prices. Other projects, such as the second stage of Kuwait airport, which includes hangars and car parks, will continue; Kuwait Portland Cement will tender for this. Overall, the market is improving, and we hope the number of new projects opened for tender will remain the same. It is important that the public sector allows the private sector to take a bigger share in the Kuwaiti economy. The government seeks to shift many projects to the private sector through Kuwait Authority for Partnership Projects (KAPP), and the Shamal Azzour project is probably the best example of the private sector’s positive effect on the economy. Kuwait’s second-biggest project is the Umm Al Hayman Wastewater Project, which is being done through KAPP. It was awarded to a consortium of Kuwaiti, German, and French companies, and we hope to be a part of this project. The metro project and phase two and three of Shamal Azzour will come through KAPP. In that sense, we hope the tendering process will become more efficient because of Kuwait Direct Investment Promotion Authority (KDIPA) and other organizations established by the government.