Murray & Roberts group to close its construction firm

The South African construction firm Murray & Roberts, which helped transform the UAE skyline by raising landmarks such as the Burj Al Arab, is to quit the building sector.

The surprise announcement was made this week as the 114-year-old company released its interim results for the six months to December 31.

The Johannesburg-based company is to focus on three core sectors in future – underground mining, oil and gas and power and water said Henry Laas, the chief executive. The move marks the exit of a company that was an integral part of the UAE’s construction charge since the 1990s.

“The decision to dispose of the infrastructure and building businesses supports the group’s long-term strategy to focus its business on the global natural resources markets, and follows an extended period of careful planning and consideration,” Mr Laas said.

The company has been saying for some time now it wanted to exit from construction, which it no longer considers to be central to its business. “Nothing obvious comes to mind, although they have been describing their building and infrastructure business in South Afirca and the Middle East as noncore for some time,” an unnamed analyst told Business Day newspaper in Johannesburg.

Founded in 1902, the company had in recent years become closely associated with the UAE’s surging construction drive. The Burj Al Arab, which it built in collaboration with the Al Habtoor Group, was the Murray & Roberts’ first project award in the UAE and it oversaw building the main structure and interior fit-out of the 7 star, suites-only hotel.

Completed in 1999, the Burj Al Arab set the pace for many architecturally significant buildings that have come to dominate the UAE’s profile.

In the years since then, Murray & Roberts has grown throughout the GCC with its headquarters based in Dubai and operations in Abu Dhabi, Qatar, Saudi Arabia, Bahrain, Oman and Kuwait.

Murray & Roberts has also participated in constructing landmarks such as the Shangri-La Hotel and Goldcrest Views towers in Dubai.

It built the Al Attar Business Tower and participated as a subcontractor in The Palms. Murray & Roberts is also behind the raising of the 33 story National Bank of Abu Dhabi.

In South Africa, the company was for many years the country’s largest construction firm, building the Cape Town stadium for the 2010 Football World Cup, for instance.

However, the group has struggled with a fall in commodity prices and a softening construction sector in the Arabian Gulf. It has also had to contend with outstanding legal claims such as a continuing dispute relating to its participation in the construction of Concourse B at Dubai International airport. The group is still trying to settle an outstanding payment for the work, for an undisclosed sum.

At the results presentation, Mr Laas said that total outstanding claims came to two billion rand (Dh51m), which included the amount it was demanding from Dubai International. This figure also covered another dispute relating to the construction of a light rail network in South Africa.

The group reported revenue of 15.3bn rand, down from the 15.9bn rand in the corresponding period last year.

Mr Laas said that oil and gas and underground mining had traditionally contributed 80 per cent of group profit. The company would now focus on oil and gas in Australasia and the US and Canada. Underground mining would concentrate on South Africa and the rest of the continent, as well as Australia, Canada and the US.

There are no plans to pursue further projects in the Middle East, a company spokesman confirmed. Outstanding construction work in the UAE will be completed by next year with no further work planned.

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