How has El Seif Engineering Contracting dealt with the pandemic, both internally, in terms of managing costs and protecting its staff, and externally, in terms of managing its projects?
It has been more than a year since COVID-19 turned the world on its head, and the pandemic is still raging with unprecedented reach and proportion. At El Seif, our first priority was protecting our people and safeguarding business continuity. In the early days of the pandemic, we formed a crisis management committee to act as a nerve center to help the organization respond to the challenges posed by COVID-19 outbreak. Our response plan was organized around a timeline strategy: "Respond" to the immediate threat; "Stabilize"; and "Return the business to scale". We made tough but necessary decisions to ensure the safety of our people by reducing the risk of transmission and supporting those who were infected. We transitioned thousands of people to work remote overnight, cancelled all non-essential travel, and relied heavily on our sophisticated IT infrastructure to conduct a large portion of our business virtually. The investment in our digital systems over the years has truly paid off. Our COVID-19 response plan ensured that mission critical functions continued to run smoothly. We worked with our clients, partners, banks, and supply chain to minimize the impact of COVID-19 on our business. We also developed an overall COVID-19 communication plan focused on leadership through crisis, showing empathy and building trust, while we also provided frequent updates to enhance transparency across the organization. The following broad workstreams underpinned our COVID-19 mitigation strategy: protecting our people; strengthening business resilience; "messaging"-communication; and engaging with government agencies and key stakeholders. The early adoption of our restructuring initiatives even before the significant spread of COVID-19 put us well ahead of the curve from both financial and operational perspectives, preparing us to better control our costs and manage our cashflow. These are critical for a renewed, resilient business strategy focused on efficient and effective operations, a more robust predictability of our financials, rebuilding our backlog position, and reinforcing our balance sheet by preserving cash while maximizing revenue and enhancing our liquidity. Despite our resilience, we are not immune to risks. We never stop evaluating emerging risks, as well as opportunities. If anything, the events of the past year have only sharpened our focus on evolving events that could impact our company.
How has new technology influenced your business model, and what are your future ambitions around digitalization?
Over the past few years, we have made great strides in modernizing our back-office systems and structure to support growth and scale in the future as well as ensure productive virtual operations. El Seif's recent achievement as the 1st company in Saudi Arabia to earn the international benchmark for excellence in digital engineering and project delivery (BSI Kitemark certification in BIM ISO 19650), represents a significant milestone in our digital strategy. With El Seif's achievement, the Kingdom has become the 20th country to hold the BSI Kitemark for BIM globally, which gives us all a great sense of national pride. We are also especially proud that the majority of our BIM staff are young Saudi male and female engineers paving our digital future. Furthermore, we are implementing a digital transformation initiative in partnership with a world-class construction technology provider to build AI into our work processes as an investment in our future competitiveness to improve business results. Our digital strategy will see us run our projects' day-to-day operations more efficiently, optimize resource utilization, expose performance risk, and realize improved margins associated with standardization, integrated delivery, connectivity, and leveraging of new technologies. To support this ambitious effort, we are digitalizing and integrating our EPC functions, from tendering, through design, procurement, and execution to handover. This is a necessary step to build our company for the long term to ensure our processes, tools, and structure keep pace in the rapidly changing digital age.
El Seif is one of the best-known engineering and contracting firms with a long history of megaprojects in Saudi Arabia such as the Kingdom Tower, Princess Noora University, and King Abdullah Financial District. What is your value proposition?
The success of El Seif lies in our unshakeable commitment to the organization's core values: Excellence, Innovation, Integrity. For all our customers, the certainty of safety, quality, cost, and schedule that we deliver is critical. Their view of our performance in these criteria is reflected in how they often entrust El Seif with new and complex projects. Our landmark projects have transformed the skylines of the region's major urban centers. Since the establishment of El Seif Engineering Contracting in 1975, we have maintained our commitment to the highest standards of quality in delivery through our world-class people and processes. We are a people-based business and foster a problem-solving culture with clear values and strong leadership. El Seif's long established knowledge of the construction landscape and supply chain in KSA coupled with its relentless pursuit of excellence and innovation by its most treasured asset—El Seif people—has earned the company a reputation for getting the job done "right" no matter how complex, no matter how large. At El Seif, we believe in investing in our human capital. Our pipeline of local talent is expanding, and we intend to take Saudization to the next level and seed the Kingdom's future construction industry leaders. El Seif has a keen, patriotic interest in the country's overall economy and Vision 2030. As a major player in construction, our mega projects have a multiplier effect on the Kingdom's GDP. We continue to improve and modernize our construction industry through delivery excellence and the application of innovative solutions and latest technologies such as modular MEP, drone and robotics, BIM 5D, AI, and digitalization of our construction work processes to build our company for the long term in the rapidly changing digital age. El Seif continues to grow as a leading force in the region's business and construction industry. Its growing resources and expanding activities in strategic sectors of its regional markets underpin El Seif's role as an instrument in the region's progress toward a better future.
The last 12 months have been a challenge but have also featured opportunities. What are your expectations and ambitions for 2021?
As we confronted the continuing economic uncertainty and government spending cuts driven by a double crisis of the coronavirus pandemic and the meltdown of global oil markets, we were fortunate in several respects. First and foremost, the high level of responsibility and selfless commitment of our people meant we were able to collectively and efficiently implement measures to prepare our company to cope with the crisis. Our recent restructuring in the early COVID-19 days and the implementation of an organization-wide cash preservation and cost out program helped strengthen our business resilience. In 3Q2020, El Seif was assigned a long term A-credit rating with a “stable” outlook from Tasnnief, Simah Rating Agency, for the second year in a row. That same year, we achieved our 2020 business plan within budget under difficult and testing COVID-19 conditions and adopted a proactive screening and selective bidding approach to target quality projects while building up strategic JV partnerships with international players resulting in major new awards. 2021 presents exciting opportunities for El Seif, as we adapt to a changing landscape of government spending toward Vision 2030 projects. We are defining our strategic direction over the next five years to create a more resilient company by evolving our operating model and go-to-market strategy, expanding our mix and range of services, and delivering on our digital innovation vision. Our customers and partners see us integral to their success. We will anticipate their needs and deliver on every commitment we make.