A sense of equity
The last three years have seen HRH Prince Khaled bin Alwaleed bin Talal, founder of KBW Investments, acquire —in short succession— an eclectic portfolio of investments in construction and technology companies from across Europe.
The spending spree began in 2014, when in short succession KBW acquired both the 150-year-old Italian tower crane manufacturer Raimondi Cranes, as well as a 50% stake in the Romania’s Arcadia Engineering — a firm poised to expand into the Gulf countries.
In the two years since, KBW has partnered with numerous other consultancy firms, and in June this year, allied itself with French technology firm Ascorel, which specialises in electronic systems designed to enhance the safety and efficiency of heavy equipment operations, and a company with a history of collaboration with Raimondi Cranes.
Heading up KBW and acquisitions like Raimondi Cranes (from an operational standpoint), and thus arguably the most suitable person to explain the strategy behind these acquisitions and partnerships is Prince Khaled’s right-hand man and the group CEO of KBW Investments, Ahmed Alkhoshaibi.
Taking it from the top, he explains: “Post-2008, I think most people will agree that the market conditions allowed for advantageous acquisitions in the construction sector, and KBW was keen to enter the segment.
“Prince Khaled saw the value that Raimondi Cranes, as a heritage company, would add to the portfolio. As cranes are needed for pretty much every type of development, crane manufacture is an extremely important pillar for the construction industry.
“Looking at it from a business perspective, cranes can be considered somewhat of an index as to how the overall construction sector is faring. When cranes are populating jobsites and being sold or hired consistently, it acts as a type of economic barometer and says good things about the sector’s health.”
This year, another important indicator of the industry’s health was the Bauma exhibition in Munich, where Raimondi unveiled its largest topless tower crane, the MRT189. With a maximum jib length of 65m and two versions, with capacities of 10t and 8t, it is the best current representation of Raimondi’s capacity for product innovation.
One feature of MRT189 crane highlighted by Raimondi’s technical and design teams is the increased safety during assembly and disassembly phases, and the 20% reduction in the total time taken for the installation of the upper part — which also reduced the number of operations undertaken at altitude.
A certain portion of the credit for these achievements lies with KBW Investments, which, upon acquiring Raimondi, immediately sought to capitalise on its talent base of skills, its technical excellence and its innovation.
Alkhoshaibi notes: “Since the acquisition of Raimondi, KBW has injected significant capital into the manufacturer. The bulk of this has been devoted to empowering the company’s R&D segment; resources have been allocated to that particular arm of the business to encourage innovation and optimal output.”
At the time of its acquisition, Raimondi estimated that it would receive in the region of $100m of investment over three years.
Today, Alkhoshaibi notes that the dividends continue, and that the 40t-plus range being developed by Raimondi’s R&D department is coming along well — and is scheduled for delivery to market in mid-December 2016.
At the Ankomak 2016 trade exhibition in Istanbul, Raimondi Cranes also unveiled the new MRT159 topless tower crane, which can lift a maximum load of 10t, and a maximum tip load of 1.65t at the extremity of its 65m-long jib — which is 25% more tip load that its predecessor, the MRT152.
The MRT159 also delivers greater flexibility to the jobsite, coming with a range of different jib configurations, and a selection of three different 30kW, 37kW and 45kW winches.
Another change brought about by KBW has been organisational, and Alkhoshaibi highlights how the company had previously been suffering from a so-called silo operational structure, where divisions interacted poorly with each other and are focused on furthering their own interests rather than the company’s.
Under KBW’s guidance, he notes that “past inefficiencies within the company have been addressed and corrected by increasing inter-company communication and involvement”.
KBW Investments has also been able to leverage its investments to see Raimondi Cranes employed on projects on a consistent basis through collaborative undertakings with its portfolio members, and Alkhoshaibi states: “KBW, as a group, is successfully positioning Raimondi cranes on jobsites that other portfolio members are working on, thereby increasing market share and penetration.”
However, the veteran Italian company also enjoyed a strong network and reputation as an inherent strength of its long history in the market. Alkhoshaibi comments: “Due to Raimondi’s diverse markets, weathering the current climate has been relatively easy. The backbone of Raimondi’s consistent sales and positioning on important jobsites globally can be credited to our strong agent network.
“In Europe for example, Raimondi recently announced positioning on a pivotal large-scale site in Dublin, the Capital Dock development by Kennedy Wilson, and at Great Scotland Yard, a prestigious landmark jobsite. Our focus going forward is strengthening our position in North America, and particularly in the USA. We see this market as perfect for our bigger capacity cranes that are under development.”
Raimondi cranes can be readily found on construction sites across the Gulf. In a recent example, Spanish contractor Harina employed three LR213 luffing jib tower cranes — Raimondi’s largest to date — on the company’s latest project in Qatar, the construction of 250m-high JW Marriot Hotel West Bay.
The LR213 has five jib length configurations, from a maximum length of 55m to a minimum length of 28m — all with a maximum capacity of 14t, with and a maximum tip load of 2.25t in the 55m-jib configuration.
The crane can also carry up to 1,000m of rope on its drum, and is also designed for and ease of assembly and maintenance — with a single electrical cabinet on the cabin platform for quick installation and cable connection, and easy subsequent access for technicians.
Falling neatly into place to complement this impressive product range is the partnership between KBW Investments and France’s Ascorel in the Gulf and MENA region — a mover which is, in every sense, a strategic endeavour to further support the growth and development Raimondi Cranes in the region.
Alkhoshaibi states: “That is the strategy. Ascorel’s anti-collision technology is already offered with every Raimondi crane, and there are already ambitious future plans between the companies. Currently our R&D arm is working on an innovative enhanced system with an interface that increases the synergy between crane and anti-collision technology.
“This interface is still in the early stages, but it’s in the works and making strong progress. We have yet to release any information about the technology itself, but as the project develops we’ll be communicating the results to our global partners and agents.”
Last year’s crane tragedy in Makkah has also highlighted the need for greater safety in crane operations in the region, and Alkhoshaibi comments: “These recent events called to light industry challenges that are pervasive on jobsites globally, not just in the MENA region.
“It will perhaps even prompt a movement toward ensuring more investment into safety and security on the jobsite. What’s needed, in my opinion, is preventative measures that include closer relationships between manufacturers and end users —the contractors and developers— and consistent training upgrades and refreshers for all relevant jobsite personnel, including crane operators.
“Opting for safety technology is somewhat of an insurance policy in the construction industry: you may not see the added value initially but you’ll certainly be relieved it’s there helping to prevent and reduce the number of jobsite incidents, and mitigating potential hazards. Safety technology, as a preventative measure, is certainly much more cost-effective than any other alternative.”
Moving forward, KBW Investments is targeting infrastructure as one of its top priorities in the next 12 months, for the mutually supportive avenues of growth that such projects would provide for its construction portfolio. KBW recently signed two top-level deals public-private partnerships (PPP) in Jordan, and expects to continue to allocate substantial resources to PPP opportunities.
Alkhoshaibi adds: “There is still ample market opportunity in construction, but the companies that we will be considering for the group portfolio must be scalable globally — not just in Middle East.”
However, whichever acquisitions and partnerships come next for KBW Investments, it would certainly seem like Raimondi Cranes has the winning ticket to an ever-widening presence and market share in the Gulf.
It will also be interesting to see what KBW makes of the potential synergies between Raimondi and Ascorel. The only real certainty is that KBW is nowhere near finished; on the contrary, this could be just the beginning.