An air of optimism in Saudi Arabia

Saudi Arabia

Ibrahim Alghunaim, general manager of the Al Hoty Group, talks to The Energy Year about services the company offers to businesses looking to enter NEOM and the environment of business optimism in Saudi Arabia. The Al Hoty Group is a professionally operated services company conducting business operations in Saudi Arabia.

Please give us an overview of the Al Hoty Group’s main activities.
Since 1972, we have kept the philosophy of our founder: to be flexible and respond to the market. Our business began with one manpower contract with Saudi Aramco, which we have been carrying out for five decades. We established a JV with a UK company back in 1973, we have five branches all over Saudi Arabia, for testing, calibration and manpower. We are also present in Bahrain and the UAE. In 2023, we will celebrate our 50th anniversary, during which we will announce our new division.

What will be the focus of this new division?
As Saudi Arabia was becoming the focus of international investment for its attractive investment programmes and economic stability, we were approached by companies who are very much interested in coming to the country. We have a couple coming in 2023, and we are creating their entry plans. We are doing consultancy in a way, in addition to the physical work to prepare their sites and to provide them with all of the essential services they need on day one at the work site, especially in remote areas. Most of these companies wants all facilities set before touching ground.
We do all the set-up starting from site offices and accommodation to operation and maintenance.

What kind of services can you offer for companies coming into NEOM?
In NEOM, we are now signing some agreements to set up living facilities and offices for 2,500 people. We can take care of all of the support services for incoming companies wanting to set up office in the city. We transform what we call the “zero ground desert” into something that they can use as offices and accommodation. Keep in mind that NEOM is a very unique territory in that it’s 90% desert.
Back in 2019, we were the first to land in NEOM and open our office there, in the batch plant area. We concentrated all our services to support the newcomers to the area. Large companies are starting to arrive there to do business, and so we are developing the logistics side and the infrastructure by setting up offices, facilities and more. We are now focused on preparing the best ground as per European or American standards for companies who are coming from abroad.

What is the group’s footprint in calibration and inspection, and how competitive is this segment?
In inspection and calibration, we have almost 1,500 clients, from small projects to large, long-term ones lasting three to five years. We’ve lived with competition for 50 years, and here we are. We had people who joined us in the late-‘80s and are still active members of our divisions due to their substantial accumulated experience.
Competition is there. It’s an open market, and opportunity is given equally to everyone. There is no favouring of local companies if they are not up to par on the technical level, especially in this field. It’s still a healthy market.

What is Al Hoty’s strategy to expand?
Our growth philosophy is market driven, when a new service is required, we aim to gear up and allocate all our resources to set up a new division which will do the job and go beyond to market and so on.
It depends on the market. Sometimes a project comes in requiring five services, for example. You have four, but you don’t have the fifth one. In this case, we can subcontract another company that is certified to do it, and then from there, we grow that line of business. It’s a small seed, and then it becomes a branch. It depends on the profits.

How do you explain the business optimism experienced across Saudi Arabia?
I predict we will grow 15-18% every year until 2027. We should. If we don’t do this, we’re missing out on opportunities. In the early ‘70s, we had oil prices boom from USD 1 to USD 10. That was crazy. Activity was doubling, projects were everywhere. However, there wasn’t a clear picture like there is today with the country’s Vision 2030. All we need is just a click away: statistics, predictions, construction venues and support for localisation. Plus, we are not as dependent on oil as we were five years ago.
We know that when the government says “we’re going to spend USD 10 billion,” they will, because they have the funding. The economic resources now are totally different. Whatever they announce, we trust they will accomplish. They may slow down on one or two projects, but that’s normal.

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