As chief executive officer of Bahrain Mumtalakat Holding Company, Mahmood Hashim Al Kooheji represents a steady hand on the tiller of the Gulf state’s investments.
Bahrain’s sovereign wealth fund was established in 2006 to build and manage a diverse portfolio of assets for the kingdom. In little over a decade, Mumtalakat has grown this portfolio to include stakes in more than 50 commercial enterprises, which span the fields of logistics, consumer and healthcare products, general services, financial services, industrial manufacturing, real estate, and telecommunications and technology.
As such, Mumtalakat’s construction-related interests are expansive, to say the least. The organisation owns stakes in a broad range of high-profile companies, including Aluminium Bahrain (Alba), Bahrain Airport Company, Bahrain Real Estate Development (Edamah), Durrat Khaleej Al Bahrain Company, and Southern Area Development.
Yet despite the breadth of his remit, and the national interests at stake, Al Kooheji is unwilling to entertain the idea of government handouts. On the contrary, Mumtalakat’s CEO is adamant that both his organisation and its portfolio companies must remain self-sufficient in order to add value to Bahrain’s economy. If a Mumtalakat company wishes to expand, he explains, it must demonstrate the feasibility of its plans, and secure the requisite funding based on the strength of its own finances.
“We seek private sector investment in all of our projects,” begins Al Kooheji. “We do not pursue projects [solely because of a perceived need]. If the private sector believes there is demand for a project, and it has the potential to result in a healthy return, then we will proceed. Private sector involvement is very important. It brings business and commercial sense to proceedings.”
When it comes to development, Al Kooheji views the private sector as both an effective source of funding, and a valuable second opinion. He elaborates: “When one of our commercial enterprises approaches a bank for funding, we gain a second pair of eyes on the project. The bank will look at the proposal and, if it’s feasible, provide funding. If the bank is not comfortable, it will [refuse funding]. Because it’s the bank’s money that is being invested, it adds discipline to the process.
“At Mumtalakat, we don’t obtain funding from the government,” Al Kooheji continues. “We fund our projects based on our own cash flow and balance sheets. So when [wider economic circumstances affect national revenues,] our work is not disrupted. That’s why I believe that our companies need to be self-sustainable. If they require equity, we will work with them to obtain it, but we do not lend to our companies. That is the banks’ role, and Mumtalakat is not a bank.”
One of the largest projects within Mumtalakat’s current portfolio is Alba’s Line 6 expansion. The $3bn (BHD1.1bn) initiative, which is being led by engineering, procurement, and construction management (EPCM) contractor, Bechtel, will add 540,000 tonnes to the aluminium smelter’s annual capacity, taking its total production capacity to 1.5 million tonnes per year. Main construction works for the project commenced last year, and the new pot line is expected to begin production activities in Q1 2019.
“Once completed, this will be the largest single-plant aluminium smelter in the world,” Al Kooheji tells Construction Week. “Alba’s Line 6 expansion project involves the development of a completely new, dedicated line at the back of the [existing site]. It will be integrated with all of Alba’s existing facilities.”
In keeping with Mumtalakat’s philosophy of self-sustainability, Alba’s Line 6 expansion was subject to significant scrutiny during the planning stage, and this diligent approach has been extended into the construction phase. Despite the magnitude of the project, Al Kooheji is supremely confident in the Alba team’s ability to deliver the expansion within the agreed parameters. When asked whether he expects the project to meet its proposed deadline, he responds: “I have no doubt. I think that Alba’s track record speaks for itself. The company has always been very disciplined in this respect.
“And let me tell you something else,” Al Kooheji continues. “When one of Mumtalakat’s companies puts a plan in place, we [monitor] it by the day – not by the month. If they say they will start production on a particular date, they usually deliver on that date. We may allow them a few extra hours, but not days,” says Al Kooheji, only half-jokingly.