An ability to learn and timely diversifications account for the success of Bahwan Engineering Company
The client list of Bahwan Engineering Company (BEC) reads like the who's who of the sultanate. The headquarters of Central Bank of Oman and Bank Dhofar, City Centre, most of the ministry buildings in Muscat, the Oman LNG plant in Sur, Sohar Refinery project, Seawater Intake and Return System in Sohar... the roster of its works seems endless.
BEC is an integrated construction company which carries out civil, mechanical, electrical, instrumentation and maintenance work under one umbrella. C K Khanna, general manager, corporate, BEC, says, "Few companies in the region can offer the range of construction services that we provide." But things were not always this way.
Khanna recalls the time when BEC got its first hospital project. Since the client did not have enough confidence in the company's ability, it insisted on getting an external expert. But within six months, recognising BEC's skills, the client did away with its insistence on an external expert. Since then BEC has gone on to build a majority of government hospitals in Oman.
Project profile
The company is at present working on a host of complex projects in Sohar like the RO22mn Seawater Intake and Return System. The plant will cater to the water needs of 17 industries in 13 corridors. Khanna says, "This is the first project of this scale being built completely by a local company in Oman."
The complexity of the project can be seen from the fact that the under-sea pumping station is 1.7 times the size of a football pitch. The thickness of the walls of the pumping station ranges from 1.5 to two metres and require 10,000 tonnes of steel.
In addition, the company is also associated with Sohar Refinery Project, Sohar Power and Desalination Plant, Sohar Fertiliser Project and the RO48mn IWPP (power transmission system) project.
Thanks to its competence, BEC has been winning contracts beyond the shores of Oman. In the UAE, its has built power plants at Al Aweer and Jebel Ali. In addition, it is carrying out mechanical and electrical work on nine multi-storeyed buildings in Dubai. BEC seems to be living up to its tag line, 'Omani company with international standards.''
Learning curve
The company owes its success to being an organisation which is constantly in a learning mode. For example, the Oman LNG (liquefied natural gas) project in Sur was the first time that BEC embarked on a project of such magnitude. The company was a part of the project from November 1996 to January 2000. Khanna says, "We just could not have a reference point, as the sultanate did not have an LNG plant from which one could learn."
Taking on the LNG project as a challenge, BEC put together a work force of up to 2,400 personnel on the ground. It erected temporary utilities for 7,000 people and 18 non-industrial buildings on an engineering, procurement and construction (EPC) basis.
And on a construction basis the company carried out industrial civil works and mechanical installation of piping works for off-plots and utilities plus electrical and instrumentation work for the entire plant. The company's ability to learn on the job enabled it not only to deliver the goods, but also stood it in good stead in its future projects.
Similarly, carrying out the mechanical and electrical services at City Centre in Muscat served as another challenge for BEC. It was not only the largest air conditioning project in Oman, but also required complex work to be carried out on an extensive scale within a short period. Carrying out structured electrical cabling in the Central Bank of Oman building was another project that was similar in nature. Khanna explains, "The intricacies of projects vary from one to another. The complexities, sophistication and knowledge required differ from a fertiliser plant to a gas station. The challenge is to deliver and to get it right at the very first instance."
International partnerships
BEC has worked with a host of multinational companies in various respects like Chiyoda Foster Wheeler (as subcontractor on the LNG plant), Mitusbishi (power plants in Dubai), Hyundai and Dusan. That almost all of them have been their repeat customers do say a lot about the competency of BEC.
Having worked on projects in the UAE, BEC plans to expand there as well as in Qatar. The company, which has close to 7,000 people on its payrolls (including 250 graduate engineers), sees them as its primary asset.
Khanna explains, "We have been able to retain many of our key employees over the years enabling us to have an in-house pool of knowledge and expertise." The senior management team at BEC has spent anywhere between 15-20 years at the company giving it a knowledge edge.
He attributes the low turnover to the working environment in the company. "Ours is a company where a lot of trust and confidence is reposited in the managers. Moreover, the management follows a family approach, giving a lot of mental satisfaction." The company strives to provide long-term job security and stability to employees through progressive and humane policies, a culture of excellence and the pride of working in one of the best companies in Oman.
Another reason behind BEC's success has been its ability to spot the opportunities, take decisive actions and assimilate the required expertise even as it managed to exploit territorial expansion and related diversification. Throughout the process, the company has held on to its core values of synergy, excellence and commitment. The Bahwan Engineering group comprises Bahwan Engineering Company, Bahwan Contracting Company and Universal Engineering Services. While the company is a market leader today, it has been through its lean phases. It has been BEC's ability to innovate and stay ahead of the curve which has enabled it to gain a leadership position.
Diversification drive
The years 1985-1990 were a phase when the sultanate's economy went through a period of turbulence. While many leading contracting companies suffered badly, BEC was able to weather the storm thanks to its diversified activity portfolio and commitment of its work force.
The years from 1990-1994 saw BEC develop a multidisciplinary construction capability and participating in the oil, gas, power and industrial sectors. That was when it decided to add Bahwan Contracting Company, a dormant civil construction company, to its fold. With the added capability as a CMEI (civil, mechanical, electrical and instrumentation) contractor, the company registered with the Petroleum Development Oman (PDO). It was also a period when the number of emplo-yees in the company grew manifold. The staff strength grew to reach a manpower size of 1,000 with 95 engineers.
Growth phase
The years 1994-1999 saw BEC embarking on integrated multidisciplinary projects in oil, gas, power and the industrial sectors. The 200MW Ghubra Power Plant MEI works marked the beginning of this period of accelerated growth. The company's bold initiatives paid off with BEC bagging the single largest overseas contract won by an Omani company, when it executed the US$45mn EPC contract for design, supply and installation of four sub stations in Dubai. And then came the order to carry out M&E works for the 600 MW Aweer power plant in the UAE. The company also became the first in the sultanate to get an ISO 9000 certificate in 1996-97. This was followed by its participation in Oman's most prestigious project - the Oman LNG project in Sur. By then, the company's manpower had grown to 4,000 with 200 engineers working at the peak.
Since then, the company has moved on to larger projects. It has bagged and executed projects like the Sur Hospital, Ibra Hospital, Qalhat Housing, Rusayl power plant and many projects in Sohar. BEC is thus poised to und-ertake mega infrastructure, petrochemical and industrial projects coming up in Oman, the UAE and other countries.
The company's Electrical Projects Division is involved in turnkey project execution, operation and maintenance of power stations, substations and distribution networks. Its major clients include the Ministry of Housing, Electricity and Water, PDO, Ministry of Defence and Dubai Electricity and Water Authority (DEWA) in the UAE.
With such a track record, has BEC acquired a monopolistic status in Oman? Khanna pooh-pooh's the charge. "The competition remains intense as despite our track record in most projects pricing still remains the bottom line. Today we are at a stage where we can pick and choose projects of a challenging nature." An enviable position indeed!
businesstoday 2005
