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Thu 1 Sep 2016 01:44 PM

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Burj Al Arab contractor set to end Middle East ops

Move comes as Murray & Roberts says it will dispose of its global construction businesses

Burj Al Arab contractor set to end Middle East ops
Murray & Roberts was involved with the Burj Al Arabs construction in Dubai.

In a move that would see it exiting the Middle East, South African contractor Murray & Roberts has announced it will dispose of its global construction businesses as it looks to realign its operations in markets with opportunities in the natural resources sector.

The contractor's infrastructure and building business was busiest in the Middle East, where the company has worked on projects such as the Burj Al Arab and Sorbonne University (Abu Dhabi). 

"Our history and capability in the Middle East extends to building and infrastructure work," a company spokesperson told ConstructionWeekOnline.

The spokesperson denied that market factors such as low oil prices or liquidity contributed to its regional exit. 

"The fact that we are completely exiting the civil engineering and general building sector as a group... is the reason [Murray & Roberts is exiting the Middle East]," the spokesperson continued.

"That is mainly the work we did in the Middle East, thus it makes sense to exit the region too."

In a press statement on 24 August, Murray & Roberts said the transactions are "in the best interests of the long-term sustainability" of the company and its infrastructure and building business.

Murray & Roberts will focus on three core sectors – oil and gas, metals and minerals, and power and water – as it exits the construction sector.

Henry Laas, group chief executive of Murray & Roberts, said: "Growing our capability in specialist engineering, commissioning, and asset support and maintenance services in these market sectors should yield higher margins and carry lower risk than services only provided in the construction segment of the project value chain, enhancing return to shareholders.

"The decision to dispose of the infrastructure and building businesses supports the group’s long-term strategy to focus its business on the global natural resources markets, and follows an extended period of careful planning and consideration." 

The transaction excludes Murray & Roberts' investment in South Africa's Bombela Concession Company, Bombela Civil Joint Venture, and Bombela Operating Company.

At the moment, the transaction also excludes the company's construction projects in the Middle East.  

"These projects are expected to be completed by December 2017 and no new projects are being pursued," the spokesperson continued. 

Murray & Roberts' board of directors has also decided to dispose of Genrec, the only remaining manufacturing business in its portfolio of businesses.

Negotiations with prospective buyers for these businesses are at an advanced stage, the statement continued.

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