Abdulrahman Al Khannah, group CEO of Beyout Holding, talks to The Energy Year about deploying HR and real estate services synergically and the important contribution of private holding companies to Kuwait’s economic growth and diversification. Beyout Holding is a Kuwaiti-based group engaged in HR, logistics and real estate asset management.
How do you view IPOs as a value-creation strategy for state-owned companies, and what is your assessment of examples in Kuwait from a governance and efficiency standpoint?
There is a fundamental challenge with government ownership thresholds in Kuwait. Government ownership often introduces rigorous oversight procedures, which, while important for accountability, may limit the agility typically associated with private sector operations. Even if these entities are managed by capable people, the process-oriented nature of public ownership hampers the agility and efficiency typically associated with the private sector.
In contrast, countries such as the UAE and Saudi Arabia have been able to give independence to state entities that have spun out. When PIF in Saudi Arabia creates a company, it is genuinely independent and can make independent and quick decisions. Here in Kuwait, even basic procurement decisions require justification and are subject to rigid procedures.
Post-privatisation IPOs have proven to be the better path. Warba Bank and Boursa Kuwait are excellent examples, and Zain’s transformation from a state-owned telecoms company to a private giant generated massive value. In my view, Kuwait should prioritise privatisation, with the possibility of pursuing IPOs as a second step.
How are family groups impacting the IPO landscape in Kuwait?
Family businesses are playing an increasingly important role. Ali Alghanim was one of the first IPOs, and we had our IPO two years after. Since then, many family-owned firms have approached me, showing real interest in going public. I have been promoting this initiative, encouraging family businesses to pursue listing as a means of accessing capital and gaining scale.
In each panel I speak at, I notice more traction. Family businesses are agile, entrepreneurial and have long-term vision, qualities that are needed in Kuwait’s evolving economic landscape. These companies can complement a broader privatisation trend by adding depth and resilience to the capital markets.
Foreign investment is crucial for Kuwait’s development. International players bring capital, technology and expertise that the domestic market cannot generate alone. We already see strong interest from foreign investors in Boursa Kuwait, and many of our listed assets are highly reputable in terms of valuation and governance.
When international firms enter Kuwait, they often do so at significant cost. Domestic companies can provide valuable support, as we have lean operations, better cost efficiency and an understanding of the local logistics landscape. We can create a symbiotic relationship where they bring global best practices, and we help them adapt and conduct execution on the ground.
In energy, our value proposition revolves around HR solutions at scale. The K-companies are executing massive development programmes and need reliable, compliant and rapid workforce mobilisation.
We provide a complete solution that spans recruitment, housing, transportation, compliance and payroll. Large entities do not have the capacity or focus to manage mobilisations of thousands of personnel, and we fill that gap while allowing them to focus on their core business. Our responsiveness and the quality of our candidates, especially for urgent replacements, are strong competitive advantages.
The collaboration between our HR and real estate businesses is very fluid. One of the largest cost components of HR services is housing. We started with a housing department and grew it into a standalone real estate arm – REH. Owning the housing allows us to reduce costs, improve service quality and be more competitive in bids. The real estate business also acts as a stabiliser, providing consistent cash flow through rental income.
In addition, our real estate capabilities can open up BOT [build-operate-transfer] opportunities in government projects where we can leverage our property management knowledge while supporting national infrastructure goals. Real estate is a large piece of most energy projects. Constructing buildings and infrastructure on land concessions is a hurdle in the feasibility studies of operating companies, as it requires large capex that can lower returns. We can potentially create joint ventures with them and handle the real estate and HR elements while they focus on developing the projects.
Today, a significant portion of our disclosed operations is linked to the oil and gas sector, underscoring the value we bring through our scale and responsiveness. Our pricing in tenders is very competitive, and the K-companies appreciate the quality and strict compliance we bring. As Kuwait’s oil activities continue to expand, we can only expect greater demand for our services.
Our strategy hinges on horizontal diversification into new sectors such as telecom or healthcare, and geographical expansion with existing clients into markets in the region.
While Kuwait remains our operational hub, we anticipate strong growth opportunities in Saudi Arabia, given the scale of investments there and the demand for integrated services. It is a much larger market, with growing demand for the kind of services we offer. Bahrain and the UAE also present good opportunities, but with Kuwait Vision 2035, the long-term growth potential within the country remains strong.
We have built the infrastructure to support a wide range of needs, and we are the main HR services provider to the K-companies. The bulk of our contracts come from these relationships. Beyond energy, we are involved in telecoms and defence, with services that include facility management and vehicle maintenance. We have created a robust infrastructure capable of deploying blue-collar and white-collar staff at scale, and we can take care of many non-core activities for our clients.
Beyout Plus is a major development within Al Mutlaa. The entirety of its roof surfaces is fitted with solar panels, in an example of how real estate and logistics infrastructure can support large-scale renewables deployments.
The project will support economic growth in North Kuwait and can serve as a blueprint for future PPPs. The government provided the land, we invested in the infrastructure, and the business ecosystem will benefit from improved logistics services.