Investing in the growth of Saudi Arabia
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Emaar, The Economic City: building a city of the future WRIT TEN BY
CATHERINE S TURM AN PRODUCED BY
HE Y K EL OUNI
Juman Park , Baylasun District
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In order to build the largest privately-owned city in the world, Emaar, The Economic City has undergone a significant procurement transformation
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Tadawul-listed real estate development and management company, EEC’s primary focus
is the planning and development of KAEC. When it launched its successful IPO in July 2006, EEC made history: more than half of the Saudi population subscribed. EEC is headed by Emaar Properties PJSC and a number of high-profile investors from Saudi Arabia. KAEC focuses on five essential sectors, including logistics, non-oil industries, leisure and tourism, quality
of life “real estate development� and,
consultants and suppliers to the new
finally, youth support.
city to facilitate its ongoing growth.
Building more than 10K residential
Situated on the coast of the Red Sea,
properties, the company has devel-
the new city, named King Abdullah
oped six residential neighbourhoods
Economic City (KAEC), has become
outfitted with the highest standards of
the largest privately funded new city
facilities designed to suit all types of
worldwide. Spanning an impressive
residents. EEC is passionate about
181mn square meters the area is the
building a city for the future. Working
home to 30 tourism projects, 10 of
with partners, such as Creet Contract-
which are already operational, such as:
ing who are currently undergoing the
The Royal Greens Golf and Country
second phase of building the local
Club and Bay X Conference and
village, EEC has moved contractors,
Entertainment center, with 20 other 05
Baylasun beach, Baylasun District w w w.e maa r. com
YOU START... WE DELIVER DESIGN & BUILD TURNKEY TURNKEY CONSTRUCTION MEP CONSTRUCTION
Mission Maximising our long term benefits by satisfying customers’ needs through value added design, construction and project management services.
Vision To become the quality leader in KSA, and the preferred choice by our current and future clients, in all the business sectors we are specialised in,
VISIT OUR SITE CONTACT US
The World Academy school, Murooj district
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projects set to launch later this year.
international brands such as Mars,
EEC also aims to provide high-standard
Ikea and pharmaceutical giant Pfizer.
educational and healthcare services.
Additionally, the city has King Abdullah
It currently has two medical institutions
Port, the first port in the Middle East to
and has launched The World Academy
be fully owned, developed and operated
in collaboration with Global GEMS,
by the private sector, and is one of the
a well-known educational establish-
fastest growing ports in the world.
ment. Additionally, Prince Mohammad
However, to facilitate this process,
Bin Salman Collage for Management
Emaar, the economic city has sought
and Entrepreneurship has already
to transform its procurement capabilities.
welcomed its first batch of students.
Working for a multitude of multinational,
KAEC’s Industrial Valley attracted more than 100 companies, including
regional, local and private companies, Senior Director Hesham Elabd w w w.e maa r. com
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Waha district
“We are moving into the partner phase where a lot of CEOs have procurement officers to help them get better economy of scale, leverage business and find new technologies” — Hesham Elabd, Senior Director, Emaar, The Economic City 09 E X E C U T I V E P R OF IL E
Hesham Elabd Graduating as an Electronics Engineer from Alexandria University, Hesham has worked in a number of senior management roles for companies such as Procter & Gamble Company, Alfozan Building Materials/Madar Holding, Savola Group, Rezayat Group and Emaar, the economic city. Working across various business areas, such as: General Management, Business Development Planning, Purchasing Sourcing and Procurement, Total Supply Chain & Initiative Management including Operations logistics, Administration, Systems Re-engineering, Projects Management and Manufacturing, Hesham has successfully led operations, built strong organisations and delivered significant results.
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has witnessed how the procurement industry has evolved and looked at ways to remain ahead of the curve, leading the organization to move procurement from a reactive participant to a proactive, trusted partner. “We’re the developers of a new city. Procurement for such types of a mega scale project is very challenging. Procurement is no longer about handling documents and being just processors and raising purchase orders. Our procurement model is way beyond that,” he says. “Now, we are moving into the partner 10
phase where a lot of CEOs have procurement officers to help them get a better economy of scale, leverage business and
Prince Mohamed bin Salman Collages for business and Entrepreneurship
find new technologies. We’ve moved over the years from followers to leaders taking part in setting the company’s strategies and execution programme.” As companies continue to face increased challenges such as a global economic downturn, focus on cost reduction and global supply issues, the term ‘innovation’ has repeatedly been thrown around. Yet many businesses remain unaware of what this ultimately entails. “Most of these challenges are linked to the market dynamics, so procurement is a key enabler to overcome such challenges. Management are regularly pushing for
EEC offices, Baylasun District
value-add and how to get more for the money spent,” explains Elabd. “The best ways to do this is to go to a business, ask them for their requirements, share their plans, align with them on their needs and give them a procurement strategy of how to move forward. Through this, procurement can start developing plans to ensure sourcing the best value, share with business leaders the risks associated with what is being sourced, the available technologies and the expected outcome. For this to succeed, it is vital to have the right technical capability, what I would call the right buyer. The systems and processes supporting the w w w.e maa r. com
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“KAEC’s vision is to become a great enabler of socioeconomic development in the Kingdom of Saudi Arabia. It provides investors from all over the world with unique business opportunities while working towards securing the future of Saudi Arabia’s youth by creating new skilled job opportunities and total housing solutions” — Hesham Elabd, Senior Director, Emaar, The Economic City
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King Abdullah Port
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Baylasun and Marina Hotel
day to day operations have to be simply designed to allow smooth work flow.” Strong leadership and committing to deliver on objectives are something which Elabd stresses as essential. This should be coupled by having a good internal networking, alignment and strong communications. “To tackle our challenges, we undertook a six-strategy plan. First, we needed to understand our customer needs, develop our KPIs, set the goals, design the structure, re-defining our culture as procurement and finding the right people, skills and systems,” he explains. “For our KPIs, we asked different departments, companies and business units on their expectations from procurement. We had 12 questionnaires sent out and based on the findings, came up with the goal of “10 in 10 through Smart Buying,” which means 10% savings in 10 years.” Through the strategy, the organisation has overhauled its structure mix between centralisation and decentralisation. Adopting the approach of appointing the Right Business Partner, who takes the lead in sourcing strategies, tending and contracting for the Business Unit (BU), the move has ensured a single point of contact across the organisation. “The Business Partner also works alongside the Business Units’ CEOs and Head of Pro-
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curement, enabling all parties to gain a complete understanding of what procurement is expected to achieve, an important element which has filtered into its cultural shift,” adds Elabd. “We now provide the needed procurement services based on the needs of the business – this is a huge cultural change. Introducing the customers’ experience was a very big thing. We also engaged with a consultant who looked at our employee capabilities in order to provide essential training.” 16
Shorooq District
Pfizer factory at Industrial Valley
CLICK TO WATCH : ‘A SPIRIT OF TRANSFORMATION’ 17 By developing the skills of its employees, Emaar, the Economic City has sought to address its digital infrastructure. Investing in Advanced Procurement Systems has enabled the business to implement the iSupplier portal which covers its entire procurement capabilities. Fully eliminating all paper-led processes has simplified the process by more than 90%, and also boosted customer satisfaction figures. Additionally, to ensure complete transparency across its procurement activities, EEC has placed all upcoming developments on its web site to enable contractors to look at each project with all basic essential informaw w w.e maa r. com
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“In 2015,our organisational engagement survey rated procurement at 44%. Last year it jumped to 86%. Customer satisfaction has reached 70%” — Hesham Elabd, Senior Director, Emaar, The Economic City
tion supplied. Companies which are awarded the business are also revealed, with project awarded values.
reached 70%,” Elabd says with pride. “Looking at the way forward, we have already launched the trusted supplier
“In 2015, our organisational engage-
programme. We have signed long-term
ment survey rated procurement at 44%.
deals with partners and fixed prices for
Last year it jumped to 86%. Our procure-
three years for our requirements such
ment team won four customer experi-
as building materials. In KAEC, a lot of
ence awards from the CEOs of the BU’s.
companies work in the Industrial Valley.
Overall Customer satisfaction has also
We recently launched a programme
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Royal Greens, Golf and country club, Murooj District
offering them free procurement services
“Future Construction Initiative.” We as
through our “A Friend to Call” service.
EEC will be working with designers,
If they want any procurement advice,
suppliers and contractors to define the
they can call us and we can help. We’re
ideal new innovative construction
also extending this support service to
method for our upcoming developments.
SMEs operating in the city and introduc-
The aim is to make KAEC the hub for
ing them to potential partners.
advanced construction solutions and
“Our latest initiative that will soon be launched in a worldwide RfP is our
technologies enabling fast track, high quality, sustainable and cost-efficient w w w.e maa r. com
“I am positive about the recognition we have received in such a small space of time” — Hesham Elabd, Senior Director, Emaar, The Economic City
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Business park and Marina , Baylasun district
developments in KAEC and possibly other Saudi cities.” Throughout its procurement transformation, Emaar, the economic city will continue to look for new opportunities to deliver savings, boost transparency and, at the end of the day, guarantee customer
satisfaction. Such commitment has
“Although we were unsuccessful,
even seen EEC Procurement become
I am positive about the recognition we
recognised by global institutions.
have received in such a short space of
The Chartered Institute of Procure-
time,” he says. “In November, we were
ment & Supply (CIPS) shortlisted
also nominated for two further awards,
EEC procurement for two global
by the Procurement Leaders, so we
awards, something which Elabd is
are being recognised internationally,
keen to highlight.
highlighting our upward trajectory.”
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www.kaec.net