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Al-Khonaini, at the forefront of Jubail's development.

AHMED Hamad Al-Khonaini is one the most respected industrialists and businessmen in Saudi Arabia's Eastern Province with more than three decades of experience gained in the core businesses of oil, gas and petrochemicals underpinned by contracting, transportation and logistics.

Through 'Khonaini International Company', Al-Khonaini is taking this diverse and highly successful conglomerate to the next level of its strategic development as an industrial powerhouse as he spearheads further expansion and investment for the group.

With the dynamic expansion of Jubail Industrial City continuing into Jubail 2 and the planning of Jubail 3, Al-Khonaini is leading significant investments in pipe manufacturing next to his recently commissioned Globetech (Global Anti Corrosion Techniques Company) and Pipe Coating Company (Mega Coat) in Jubail. The new purpose-built 9,000 sq m facility is set in a ten hectare site with ample space for supply-chain expansion close by to Jubail 2.

Al-Khonaini's ambition is to further enhance the group's reputation as a major industrial player across the region for pipe manufacturing and pipe coatings for Saudi Arabia and the Middle East by protecting the arteries of industry including Saudi Aramco, SWCC and the export markets. Leveraging from his logistics and transportation divisions, the superb infrastructure of Jubail industrial city and the export facilities at King Fahd Port, Al-Khonaini is applying the same dedication and application and customary cheerful enthusiasm that has been the hallmark of the group since its establishment.

Headquartered in Al-Jubail, close to the commercial port, Al-Khonaini and his brothers are all originally from Jubail with deep family roots within the area. In 1978, Al-Khonaini established the company together with his three brothers beginning the creation of a conglomerate that now employs more than 6,500 individuals.

Jointly owned and originally managed by his brothers Sulaiman, Ahmad, Mohammed and Abdulaziz Khonaini, separate divisions have been created to develop the particular lines of business. These divisions include Khonaini Petroleum Services (KPS) that operates 35 filling stations across the Eastern Province and is long associated with providing automotive services as well as supplying greases, lubricants, grease, diesel and gasoline.

Khonaini Development & Housing Projects divisions undertakes construction projects from EPC project work to residential compounds, apartments, commercial and institutional projects as well as site development and infrastructure projects. ENPAC covers procurement and construction and Khonaini Transportation, and includes the transportation of heavy equipment including flat beds, dump trucks, water and fuel trucks. Jubail Concrete Products manufactures precast units, blocks and tiles and customised elements through two plants in Jubail Industrial City for the construction sector. Additional divisions include Katoen Natie Khonaini, a joint venture with global logistics provider Katoen Natie, and Elite Paloume Khonaini Company, a firm specialised in international and domestic freight forwarding.

Al-Khonaini has been very much part of the unfolding story with the group reflecting the phenomenal industrial growth of Jubail Industrial City since the Royal Decree was issued in 1975 by King Khaled. The industrial city located next to old Al Jubail is considered to have been settled for more than 5,000 years and developed into an important trading route. It later became a centre of pearling as well as fishing. In the early 1930s the first American geologists who began searching for oil in the Eastern Province had landed at Al Jubail on the way down to Dammam and Dhahran.

Al-Khonaini emphasises that the importance of the recently commissioned Globetech and Pipe Coating Company Ltd (Mega Coat) is part of the group's strategy to become one of the region's leading pipe coating companies with state-of-the-art technology. The plant provides external, FBE coating (fusion bonded epoxy), external 3-layer extruded polyethylene, internal FBE coating, internal cement mortar lining, double jointing, shop and field girth weld coating, pipeline rehabilitation, external and internal liquid coating of line pipes and custom powder and liquid coating of pipe fittings.

The Global Pipe project is a grassroots SR660 million joint venture between four Saudi partners -- A H Al-Khonaini, Saudi Steel Pipe Company, Pan Gulf Holding Company and Pan Gulf Piping Systems Company -- and the global specialist pipe manufacturing company, ErndtebrE-cker Eisenwerk (EEW) of Germany.

The scope of the new project next to the existing pipe coating plant includes the manufacturing of large diameter (16-62 inch) and heavy wall thickness (8 mm-51mm) longitudinally welded (LSAW) steel pipes for the oil and gas sector, both on and off-shore and structural applications. With 200,000 tonnes annual production capacity, the project will meet part of the local demand for LSAW pipes in Saudi Arabia, most of which is imported to the kingdom whilst creating employment opportunities for an estimated 500 jobseekers.

Purchase orders have been placed for Graabener of Germany, for the delivery of four major equipment items for the project: forming (bending) press, post bending machine, end facing machine, and tack welding machine, the supply of pipe expanders to Fontijnegrotnes of the Netherlands with the Austrian Linsinger supplying plate edge milling machine.

According to Al-Khonaini, the pipe manufacturing project is being financed through private equity and commercial banks with scheduled commissioning by 2012.

Al-Khonaini has never forgotten his roots in Jubail and as well as his wide business interests remains a committed philanthropist through the Eastern Province Rehabilitation for Disabled Persons and other charitable and sports organizations and is a firm advocate of education and self improvement.

"I worked for six years in Saudi Aramco, primarily in offshore activities having left high school in my late teens and I very much believe that Aramco is a great university and educator in its own right as I learned so much during my time there," he says.

Al-Khonaini recalls Jubail as the original fishing village and the hardships with no lights and no electricity and the frugal nature of the town in the 1950s.

As the Royal Commission started its massive undertaking to create the Jubail Industrial City in the late 1970s, Ahmed was connected with offshore work at the Jubail port, creating infrastructure including engineering and contracting work for the development of King Fahd Port.

"For the last 30 years I have believed in industrial development. Even to this day there are so many opportunities to be handled. We are very busy in providing housing facilities for the expansion of Jubail with an overall population of some 400,000. Jubail is also increasing in strength in the global industrial scenario as more world-scale plants both petrochemical and manufacturing are established. During the first Gulf War of 1989-1990, when Jubail was targeted, Ahmed and his brothers remained in Jubail handling their business to deliver their contracting and other services.

"As well as my own religion, I grew up very aware that discipline and hard work were essential and Aramco certainly taught me many things including punctuality and taking responsibility. It was tough and I well recall working long hours in Ras Tanura and doing my night studies after shift to improve my technical skills.

Looking ahead to our strategic plans we are focusing not only on the Saudi market, which is huge, but also on Iraq and other areas, for the potential is huge. Over our entire history we have never demobilised staff even during the Gulf crisis and we continue to draw qualified Saudi manpower from technical colleges in Jubail and local universities and are highly committed to Saudisation," he continues.

Al-Khonaini is thinking seriously about an IPO. A person dedicated to his profession, Al-Khonaini does not want to retire.

"The group is considering many things at present as part of our strategic plans to build on our strengths and meet the demands and opportunities available. I have learned from my mistakes and have no regrets. I now look forward to taking the group to our next level," concludes Al-Khonaini.

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Publication:Oil & Gas News
Article Type:Company overview
Date:Jun 28, 2010
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