The UK-based contractor Balfour Beatty is to substantially exit from the Middle East after selling its stake in a couple of long-held joint ventures for £11 million (Dh50.2m) in cash to its Dubai-based joint venture partner Dutco.
The company had been a joint venture partner with Dutco in main contracting company Dutco Balfour Beatty and in mechanical, electrical and plumbing contractor BK Gulf since the late 1970s.
Following the deal, it said Dutco would assume responsibility for Balfour Beatty’s element of bonds and guarantees issued under the joint venture.
Both Dutco Balfour Beatty and BK Gulf employ about 6,000 staff each.
Balfour Beatty’s departure from the Middle East is part of a broader withdrawal from several international markets announced under a strategy unveiled in 2015 after the company had posted a series of disappointing financial results.
The strategy, Build to Last, has involved Balfour Beatty retrenching from Australia, Indonesia and the Middle East to concentrate on operations in the UK, US and the Far East.
“We continue to simplify the group and strengthen the balance sheet through our Build to Last programme,” said Leo Quinn, the group executive. Dutco Balfour Beatty has been a significant player in the UAE’s contracting sector. Current projects the firm is undertaking include the Dh1.5 billion Khor Dubai creekside development in Bur Dubai for Meraas, the Dh1.4 billion extension of Dubai Mall for Emaar Properties, and the new operating yard being built for the fourth container terminal at DP World’s Jebel Ali port.
BK Gulf, meanwhile, has secured regular work for major airport projects in recent years, and it is currently part of a joint venture with Arabtec Holding’s Efeco business delivering MEP work at Abu Dhabi’s Midfield Terminal Building.
The Dutco Group chief executive Tariq Baker said that the company had enjoyed a successful relationship with Balfour Beatty for more than 40 years.
“A review of the strategic objectives of the two shareholders suggested that the time was right for a new chapter to be written for the joint businesses. This would allow Balfour Beatty to focus on their target areas of operation, which no longer includes the Middle East.”
He said there would be “no fundamental change to our existing operations” following the deal.
“Dutco is part of the original fabric of construction in this area and we continue to believe we have a significant role to play in the development of the country,” said Mr Baker. “We have a strong order book and we are committed to grow the business in a controlled and focused manner.”
mfahy@thenational.ae
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