S.N. Ramachandran

Our findings state that more than 70% of the CEOs in Kuwait are confident that challenges related to a global recession will not impact Kuwait‘s economy? What are your views?

The year 2022 was a year of shock — both economically and geopolitically — that dramatically changed the mood of investors globally, regionally and in Kuwait.

The war in Ukraine sparked turbulence in commodity markets, and the global economy was struck with the biggest surge in inflation in decades, forcing central banks to raise interest rates to control it.

Despite these challenges, the latest International Monetary Fund (IMF) forecasts as well as the World Bank report peg Kuwait’s GDP growth rate to 8% in 2022, the highest growth among all the GCC countries (except Saudi Arabia), on the back of high oil prices and large reserve funds.

Considering these indicators, I do not expect that a global recession will impact Kuwait’s economy significantly, except for supply chain disruptions and increased lead times of materials by major original equipment manufacturers (OEMs). Such disruptions would cause delays in Power and Oil Sector projects, resulting in erroneous project cost estimates and impacting margins significantly.

As businesses in Kuwait continue to grow across sectors and geographies, what role will mergers and acquisitions (M&A) play in this growth curve?

I expect 2023 will be an exciting time for M&A, with transformation and transactions at the forefront of value creation strategies. But with recessionary fears continuing to be top of mind for dealmakers, all eyes will be focused as to when the US Federal Reserve will signal an end to interest rate hikes. 

I believe this will act as a catalyst for greater stability and certainty, leading to an upswing in M&A, notably among the private sectors.

As business leaders seek to surmount the varying challenges, M&A and particularly portfolio optimization will be key in helping them reposition their businesses, bolster growth and achieve sustained outcomes over the long term.

Your organization has a diverse set of portfolios. How do you think digital transformation across the organization helps?

Digital transformation is inevitable and critical to business success, be it in terms of protection against competition from disruptors, prevention and mitigation of cyber-attacks or hiring and retention of top employees.

Digital transformation puts technology at the core of business strategy. This approach can reduce operating expenses, help overcome inefficiencies, and even change the course of a business.

With a unified model across business and technology, it is easier to achievefuture ambitions. IT also helps in achieving a cost-optimization strategy through the synergies within the group companies, i.e., centralization of resources.

At the same time, technology disruptors like AI have to be studied and carefully cultivated to maximize the benefits of such technologies.

To what extent have new ways of work, such as remote work, impacted the operational priorities and/or goals? Do you think finding the right way of work will be a top priority in 2023?

The construction sector is used to cyclical downturns, but the speed and strength with which the COVID-19 pandemic struck was unprecedented.

Apart from project delays, the delays in awarding new contracts, and the delays from supply chain disruptions, employee and subcontractor labor health was a core concern, and there are practical challenges around social distancing on construction sites. We resolved such challenges by adopting the guidelines issued by the local and regional governments and abiding by those rules.

In the post COVID-19 era, we are reshaping our strategy to invest proportionately in order to eradicate the risks related to remote work and the apprehension across the workforce pertaining to job security and productivity.

Post the COVID-19 pandemic, availability of skilled and talented managers has been severely impacted which resulted in increased cost of labor. This increases the challenge of continuous skill training of personnel which will be part of our growth strategy.

CEOs in Kuwait believe that Strategic alliances, organic growth, and managing geopolitical risks are the top 3 strategic areas of growth. What are your thoughts? Where do you see growth opportunities for your organization?

Our business demands political stability in the region as significant resources are invested in projects for longer terms.

Hence, I place significant emphasis on the management of geopolitical risks, followed by strategic partnerships as the most important strategies for organizational growth and, lastly, business expansion — be it organic or through acquisitions.

Geopolitical uncertainties have indeed impacted corporate strategies and we expect it to affect the supply chain, and onboarding and retention of skilled talent, among other aspects. 

In fact, like us, many key players adjusted their risk management procedures to achieve their growth objectives.