CHAKIB NAYFE

Qatar 2020 | REAL ESTATE & CONSTRUCTION | INTERVIEW

Medgulf has stayed afloat and even thrived despite the squeeze on oil and gas industries since 2017.

Chakib Nayfe
BIOGRAPHY

Chakib Nayfe has worked on five continents throughout his career and has lived for prolonged periods in the US, Europe, the Gulf, Africa, and Australia. These and other experiences have provided Nayfe with opportunities to work with and lead cross-cultural teams in sometimes extraordinarily difficult conditions. In July 2013, he moved to Qatar after accepting the general manager position at Medgulf Construction. Since then, he has restructured the company and substantially increased its revenues by diversifying its portfolio. Now Medgulf is well-entrenched in the oil and gas, as well as the civil and infrastructure sectors.

What have been the effects of low oil prices for the construction industry and Medgulf Construction?
Since January 2016, the construction industry has really suffered because of oil prices. For three years now, this has been a tough market, with few opportunities and many competitors. Everyone is working with low margins. The blockade also affected the market slightly. However, things seem to be improving. One of the toughest years was 2018. However, in 2019, Medgulf Construction landed large and mid-sized jobs. By May 2019, we had already met 60% of our annual business plan target. Most projects are in civil and infrastructure. The oil and gas sector is still slow, though it is expected to pick up in late 2019. Qatargas will build four LNG trains, which will open up many opportunities. In addition, there are other projects being tendered now for Qatar Petroleum (QP), Qatar Fertiliser Co. (QAFCO), and other big oil and gas clients. Those projects are forecast to come online in late 2019-early 2020. The outlook is bright, and we are upbeat and excited compared to 2017-2018. Many companies sank, though fortunately Medgulf stayed afloat. We did well amidst the market conditions.

What particular opportunities do you see because of the World Cup and Vision 2030?
The government is giving its assurance that there wii be growth after 2022. Most of that focus will be on tourism and manufacturing, which are sectors that the government is promoting. With the blockade, we looked at what we could do to be more self-sufficient instead of relying on our neighbors. Now, we are establishing a coating plant because we used to send our pipes to be coated in Saudi Arabia. Tawteen is the Qatarization program driven by QP, and, in 2018, it signed four MoUs, one of them with Medgulf Construction and our partner Wasco, the pipe coating experts. We are establishing a pipe coating yard here, and that shows there is a future beyond the World Cup. The government is also opening a free zone in Qatar, which has encouraged foreign investors to invest. There is a drive by the government to sustain this momentum and ensure there will be other opportunities, not just in oil and gas, but also free zone manufacturing opportunities. Qatargas' LNG project will take four or five years, so it goes beyond 2022. These projects bring many other opportunities with them.

What is Medgulf Construction's growth forecast?
Our business used to be 70% oil and gas, and 30% civil projects; in 2019, it is the opposite, with more civil and infrastructure jobs. However, in 2020 it will feature more oil and gas-related business because of the huge projects in the pipeline. We will tap into these, as we cannot do a full train but want to take packages. The only problem is foreign companies are bidding low due to their lack of knowledge about the Qatari Market.

What opportunities do you identify in coating and offshore?
Our plan is to establish a pipe coating facility because there are plenty of pipeline projects coming up in 2020 both off and onshore. Those pipes will require either a concrete or epoxy coating. We will do the coating work at our new local plant. The plant's capacity will be around 150 pipes per day, with room for expansion if needed. Pipe coating was one of the opportunities QP offered under its Tawteen initiative to help make Qatar more self-sufficient. We have been trying to get involved in offshore work for the last three years, and Qatargas has just approved us for offshore tenders. Offshore work is not that different from our usual work; it is just the logistical challenge of getting our people and materials on site.