Leading Oil & Gas Construction Company in Kuwait: HOT Engineering & Construction Co.

Interview with Jamal N. Al-Houti, Board Member & CEO of HOT Engineering Co.

What is your assessment of the construction and engineering sector in Kuwait, especially your area of oil and gas? What are the developments and where is this sector heading in Kuwait?

The potential for sustainability and continuity in oil & gas construction and engineering is promising. Although it had some drawbacks, the Parent company thought that HOT Engineering Co. should stay in that line of business because there is room for growth. Now, we are following that strategy. There have been some companies that have fallen into a bad situation and are leaving the market. They are introducing a gap that we can fill with our resources. We are capitalizing on these opportunities.

What is your specialty? How do you differentiate yourself from your competitors?

We have talented people in our structure that can lead and manage the business. Plus, we are specialized in certain services which we pioneered. We maintain that advantage. We also have our Parent company supporting us. This is a strength that perhaps other companies do not have. We have experience from being heavily involved in oil and gas and the oil sector. Having experienced people in oil and gas joining us and the management team has been a huge support. We have the network, the knowhow, and what the oil and gas sector needs. We can plan accordingly and set our targets to meet customer requirements.

We were the pioneer in contracting, specifically in oil and gas. Over time, we have lost our place as one of the leaders in this area. Our vision now is to regain that position.

What is your strategy for HOT Engineering Co.?

When we joined the company one and a half years ago, with the desire of the owners of the company to develop and maintain its continuity, we employed BCG, an international consultant, who assessed the company. They provided us with a road map with a very well defined business strategy with clear objectives. The study was very beneficial for us. We are following that strategy and correcting ourselves as we go along and adjusting ourselves to the changing situations and scenarios in our hands. There are five key business lines we are focusing on. The first one, which is the priority, is oil and gas, consisting of three disciplines: mechanical, electrical and instrumentation, and civil. We are maintaining the man power and the resources to execute in a very professional way in order to meet the quality needed by the client. Another business line is building, which is mainly public work, not private. We have managed to get some tenders and are working towards more. The third business line is infrastructure. We are also participating with The Ministry of Housing Authority. The fourth business line is equipment services. We have a large fleet. We were the pioneer in equipment services as HOT when we started in 1974 with this line of business. Now, our strategy is to grow and renew our fleet. We are in the process of doing this and we are investing heavily in this strategy and improving. The fifth line is asphalt. We have an asphalt plant and we are trying to maximize on this business line. This was not running very well. And hence, the consultant advised us to spin off this business line because it was performing at a loss, but we proved that we can generate revenue. Now, we have focus and we are doing better marketing and reviewing our prices. We are trying to compete with other competitors and we have managed to get some projects. Now, this business line is making a profit and we will continue, thus how we adjust ourselves.

Is oil and gas your strongest line?

Oil and gas generates more revenue in terms of percentage. We are also in the maintenance sector as well providing maintenance services for oil and gas. A new focus introduced by our consultant, which we are not focusing on yet, is the energy sector, specifically power and solar energy. Currently, we are building our capability in this area to determine whether we can really expand into this sector.

What is the vision from the Parent company, Al Imtiaz Investment? What does it bring to the whole company?

Al Imtiaz Investment has many business lines and arms. HOT is an Engineering & Construction arm of this company. We have a positive impact on their shareholder values. Our performance positively contribute to their financial position, so they have given us the support to make sure that we perform and we have utilized this.

Where do you see the company in two to three years’ time and what would you like to have achieved?

We were the pioneer in contracting, specifically in oil and gas. Over time, we have lost our place as one of the leaders in this area. Our vision now is to regain that position. Many contractors have left the market because of the current situation. Now, it is our chance to once again be among the leaders and to be recognized in Kuwait. Another vision is to expand outside this region into the global market. Now, we are focused on the Kuwaiti market because there is big potential here. We do not want to lose focus. Once the situation allows us to expand under control, we will. We are assessing very closely. We know what is happening in the current market, for example GCC countries, which have been severely affecting the oil prices reduction. We are careful because we are now adopting risk assessment. We assess the risk for any action we take, the decision is made very carefully, and we follow that strategy. If we see the chances are promising, it is an option to us.

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