Prospects for long-term growth in Saudi industry

Saudi Arabia

Osama Al Afaleq, vice-chairman of the board of AlKifah Holding, talks to The Energy Year about creating synergies among the group’s portfolio companies and remaining agile in Saudi Arabia’s evolving investment ecosystem. AlKifah Holding is a Saudi business conglomerate with interests in construction, property development, finance and renewable energy, among other sectors.

What are AlKifah Holding’s activities within the energy sector?
Through one of our companies, Enar Renewables, we have had the opportunity to work with distinguished names in the industry, such as ACWA Power, on projects that hold a lot of promise for the future. They are primarily focused on power generation, with our involvement ranging from development to indirect contributions through civil works.
Additionally, we were recently selected as a preferred contractor for a BOT [build-operate-transfer] project with ACWA Power, the Ras Mohaisen Independent Water Plant. We aim to continue finding ways to contribute to renewable energy initiatives, whether by providing services to companies in the sector or by participating directly through our renewable energy capital.

Are there any other sectors AlKifah is participating in?
We provide some support services to mining companies and are exploring other opportunities in the sector. There is substantial potential, and we see the sector gaining momentum, especially with the government’s support and the passing of relevant legislation. The environment is ripe for international companies to enter, given the vast opportunities.
However, mining is a challenging industry that demands a careful, well-informed approach. We believe it’s important to take the time to understand the sector, build close connections and explore opportunities gradually. We are not in a rush to dive in. We want to stay close to the sector through partnerships and by providing services to domestic companies involved in mining. This will allow us to learn, assess where we can add value and determine the best areas for future involvement.

What makes AlKifah an attractive partner for domestic and international companies?
Companies seek partnerships to reinforce areas where they may have weaknesses. Typically, they look for technical partners, especially in civil works, as those projects require substantial civil engineering expertise. Our experience with BOT projects for Aramco and others makes us a strong partner in this regard.
For example, while ACWA Power excels at developing renewable energy generation plants, they are less interested in long-term operations. As a result, they seek partnerships with companies that can provide expertise in those areas. We have a strong track record on the finance side, having worked with major financial institutions and raised significant funds.
Our ability to create synergies across different areas has made us an attractive partner for many companies. The Saudi market is no longer about quick, short-term gains. The focus is on long-term sustainability, and anyone looking to enter the market must share this long-term vision.

How important is technological innovation for AlKifah?
In today’s fast-evolving landscape, staying at the forefront of technology and product innovation is essential. We can’t continue doing things the way we always have, as the industry is constantly changing. The nature of projects, with their modular systems and evolving material requirements, demands that we remain up-to-date on the latest advancements.
For example, we have made significant progress with our green concrete. We are trying to be as agile as possible and minimise costs while maximising workability. This is crucial for staying competitive and will require continuous effort and innovation.
We have worked with Aramco extensively on precast concrete. It’s a joint effort, as they have a vested interest in such advancements. We were also one of the first companies to introduce mobile concrete systems for the East-West Pipeline that were specifically designed to meet the requirements on the ground. We take these efforts very seriously and remain committed to driving progress in this area.

What are some key learnings from your 55 years of operations?
One key lesson we have learned over the years is that nothing stands still. You need to be as agile as you can, you need to be as productive as you can, and you need to optimise as much as you can. Our greatest asset is our people. They are the foundation upon which we build our future. Our approach combines all the necessary elements for success. We strive to attract the best talent and elevate our existing teams to drive change.
It’s essential to understand the importance of staying ahead of trends in a market that is evolving rapidly. For years, it was primarily driven by the government and Aramco, but now, PIF has entered the scene with innovative approaches and brought in a new culture. They are seeking the best that the market has to offer, and we need to be just as smart and innovative as we can be, remain on top of innovations and have a deep understanding of where the market is heading.

Read our latest insights on:

• Saudi Arabia