(This item was originally published Thursday.)

DUBAI (Zawya Dow Jones)--Dubai-baseds Arabtec Holding Thursday said its Saudi unit won a 2 billion Saudi riyal ($533.9 million) contract in Jeddah as the construction firm seeks to diversify away from its domestic market.

Arabtec Saudi Arabia's contract for the Lamar Towers project will start immediately and will take 36 months to complete, Arabtec said in a statement on the Dubai Financial Market Web site.

The main investor in the project is Zahran Real Estate Co. and the main developer is Cayan Investment & Development Co.

With the addition of the Jeddah project, Arabtec Saudi Arabia has a SAR3.5 billion backlog in the kingdom. Earlier this year, the company won a SAR1.5 billion contract in Riyadh.

Dubai-based construction companies are increasingly looking to expand their businesses in Gulf countries such as Qatar and Saudi Arabia as work dries up at home. Amid a property downturn in the U.A.E., a rising number of real-estate projects are being scaled back or canceled.

Arabtec Saudi Arabia was set up in March when Arabtec Construction signed a deal with a unit of the Saudi Bin Laden Group and Prime International Group.

Investment bank Al Mal Capital Thursday said Arabtec now has 11% of its AED30.23 billion backlog in Saudi Arabia.

At the end of January, only 12% of Arabtec's backlog was outside the U.A.E., excluding Russia. Over the past four months the company has more than doubled its exposure to other regions, excluding the U.A.E. and Russia, to 25%.

"We believe that the new company's approach to start work on Saudi projects immediately will be in their favor in the near term," Al Mal said in a note. "Not only does this enhance the future top line growth prospects, we also believe that geographic diversification and expansion will help relieve the possible balance sheet stress in the long term."

-By Stefania Bianchi, Dow Jones Newswires; +971 4 3644967; stefania.bianchi@dowjones.com

Copyright (c) 2009 Dow Jones & Co.

(END) Dow Jones Newswires

June 14, 2009 00:17 ET (04:17 GMT)

DJ Codes: country:[R/ARA,R/ML,R/SA,R/TC] subject:[N/ZDJ,N/CAC,N/CNW,N/CTC,N/DJWI,N/FCTV,N/PCA] industry:[I/CON,I/REA,I/XDJGI,I/XISL] market:[M/FCL,M/IDU,M/NND] company:[ARTC.DFM,AE000A0F6D88]