UAE-based Lamprell, a major provider of fabrication, engineering and contracting services, said it will join hands with Asyad Holdings to set up a joint venture company in the kingdom as part of its regional expansion strategy.
A key player in the kingdom, Asyad Holdings brings significant regional knowledge and forms part of a group of companies managing a diversified portfolio of businesses, including working on major projects in Saudi Arabia.
The establishment of Lamprell Saudi Arabia is core to the Emirati group's growth strategy where its primary focus to date has been the investment into the joint venture between Saudi Aramco, Bahri and Hyundai Heavy Industries to develop a major maritime yard in the Arabian Gulf, known as International Maritime Industries.
It comes in line with the firm's investment plans for Saudi Arabia and its aim to boost presence in the kingdom.
Lamprell said it was also pursuing other opportunities to gain a stronger foothold in Saudi Arabia. Among other things, one objective is to qualify as a contractor to Saudi Aramco on their Long Term Agreement (LTA) programme.
The LTA programme is where contractors undertake offshore engineering, procurement, construction and installation projects in the oil & gas sector. A key component of all LTA projects is Saudi Aramco's In-Kingdom Total Value Add (IKTVA) programme, which is designed to encourage and increase local investment by the LTA contractors.
Unveiling its new strategy in Saudi Arabia, Lamprell said it is taking steps to achieve IKTVA commitments by developing its in-Kingdom capabilities and by partnering with strong local businesses.
A key component of its plans to reach the IKTVA goal is through the formation of Lamprell Saudi Arabia, said a senior official.
"We are uniquely positioned to build our business in Saudi Arabia with the complementary opportunities of investment in the International Maritime Industries yard and our LTA bid to Saudi Aramco," remarked Christopher McDonald, the chief executive of Lamprell.
"We are committed to developing our local capabilities and we are looking to realise these opportunities by aligning with strong partners in-Kingdom. We are therefore pleased to gain the support from Saudi investors, both as a major shareholder through Blofeld Investment Management and as our local partner in our Saudi joint venture," noted McDonald.
According to him, the region has some of the strongest fundamentals in the oil sector and has demonstrated resilient production throughout the market downturn with an exceptional growth strategy going forward.
Lamprell said Blofeld Investment Management, a private family fund based in Saudi Arabia, has increased its shareholding in the company to 10.08 per cent.
The key investment by Blofeld, a company owned by the same investor from Saudi Arabia which owns Asyad Holdings, and partnership with major Saudi businesses will help boost the company's strategic exposure in the region, said the top official.
"Much of Lamprell's effort over the past two years focused on building a presence in the region and we are pleased to see our strategy supported by local partners," he added.