MVL's MD discusses $300mn of defence contracts
Abie Musa discusses UAE-based MVL's meteoric rise
Are automated manufacturing processes necessarily bad news for frontline workers?
When I first made contact with Abie Musa, he came dangerously close to apologising for the size of Dubai-based defence contractor, MVL.
The firm’s managing director seemed a little concerned that an aggregate contract portfolio of $300mn wouldn’t merit the attention of the region’s business media; a fear that I quickly attempted to allay.
Musa’s modesty is justified in one sense. Whilst contracts worth $300mn are not to be sniffed at, they aren’t quite sufficient to place MVL up there with the sector’s biggest players.
However, the timespan within which Musa and his colleagues have achieved this position, the contracts that the firm has secured, and the nature of the clients involved, make MVL’s story nothing short of remarkable.
Point number one: MVL is just three years of age. Point number two: within the space of a fortnight, the firm was awarded construction and engineering contracts for a pair of brigade garrisons and the National Police Command Center (NPCC) in Afghanistan.
Point number three: MVL’s clients include the United States Department of Defense (DoD) and the Afghan Ministry of Interior Affairs (MoIA). Plenty of individuals in Musa’s position would struggle to be so modest.
“MVL started life as a materials supply and logistics provider, catering to prime contractors for US defence projects in Afghanistan,” he explained.
“This experience paved the way for various prime contract awards in the US federal defence contracting market,” Musa added.
So just how did a fledgling materials supply and logistics company manage to transform itself into a firm with $300mn of defence contracts within the space of just three years?
“We were in the right place at the right time,” said Musa, with trademark modesty.
“We took over our first project as a subcontractor because the prime contractor became insolvent. The DoD had to re-award all of this work to somebody.
“We had already taken over as the main subcontractor on this first job – we were conducting approximately 80% of the work on that project. Since we were performing well, the client asked us whether we were interested in two additional contracts. We said that we were, and we ended up securing three prime contracts within two weeks.
“That’s how it exploded; that was the turning point for us,” he explained.
There’s no doubt that this was an fortuitous set of circumstances for MVL, but one shouldn’t ignore the effort that the firm made in order to secure these contracts. After all, we’re not talking about chicken feed. No company is awarded contracts of this magnitude unless the client is certain that they are up to the task.
The first two contracts pertain to brigade garrisons that MVL is building for the Afghan National Army; one in Helmand Province and the other in Kunar Province. Both projects include site developments, power and utilities distribution, and the implementation of storage systems.
Furthermore, Musa and his colleagues have taken responsibility for the installation of force protection measures and bunkers, and have constructed more than 200 military-grade, arch-span buildings – not to mention additional concrete masonry units (CMUs).
“The facilities in Kunar Province include an entire walled, brigade-sized garrison compound, consisting primarily of standard-design steel, arch-span buildings,” said Musa.
“We were also contracted to take care of the associated power and water distribution; roads, paths, and walkways, including parking areas; underground utilities; and infrastructure equipped to deal with a population of approximately 6,000 personnel,” he told PMV.
The third contract awarded to MVL involved the completion of the NPCC and MoIA headquarters in Kabul, also commissioned by the US Army Corps of Engineers (USACE). This project consists primarily of CMU facilities, power generation and associated utilities, wellness and recreation areas, and roadways. Essentially, MVL was charged with the creation of a world-class campus for the Afghan National Police.
“The NPCC contract was brought to us last, but with the most urgency,” said Musa.
“We had to move really quickly on that one; it was competitively bid, and the companies against whom we were bidding were very large, very well-known, prime contractors that have been operating in this sector for a long time.
“When we wriggled our way in, we were viewed very much as the underdog; who are these guys and where have they come from?
“Keep in mind that MVL had never received a prime contract before. In order to secure a prime contract from the US DoD, you’re talking about 10 to 15 years of proven past performance. Suddenly, we were knocking on the doors of some of the largest prime contractors in the industry, and they didn’t take us seriously,” he said.
So, given the stature of the firms with which MVL was competing, what gave the UAE-based minnow the competitive edge? In Musa’s opinion, it was the firm’s combination of flexibility and diligence.
“It was our ability to communicate and respond quickly,” he said.
“Our responsiveness and capacity to rapidly conduct the necessary technical analyses gave us the advantage over our larger rivals.
“The feedback that we keep receiving is that we are effective communicators. Our clients simply aren’t used to this; not only in terms of phone calls and e-mails, but also through daily and weekly reports on the progress of our projects. That’s all they are looking for; everybody has somebody in the pecking order to whom they must feed information, so if you present that information in the desired format, you’re providing a unique service,” Musa told PMV.
Having heard how MVL secured its current $300mn of aggregate contracts, I was keen to find out more about the firm’s frontline operations. What do you need in order to act as a prime contractor for the US DoD?
“The core pieces of kit that MVL uses are the FRAMECAD F450iT, which forms interior frames, and arch-span machines made by MIC Industries,” said Musa.
“We also own six Graco E30i Reactors for interior insulation applications,” he added.
In addition to this specialist plant and equipment, MVL employs the usual array of machinery and vehicles, including portable water and septic tankers, fuel tankers, dump trucks, loaders, graders, excavators, flatbed trucks, and cement mixers.
However, despite its broad spectrum of construction applications, since making the transition from a subcontractor to a prime contractor, MVL has taken the decision to keep a streamlined assets sheet.
“When it comes to plant, machinery, and vehicles, we prefer to lease whenever possible,” said Musa.
“Keeping too many assets in Afghanistan with no possibility to export would result in us having to leave them behind. This means that the decision is – essentially – made for us. The benefit of purchasing hinges on having that asset to sell on at the end. That’s what makes a unit worth buying, and this simply isn’t the case for MVL due to the nature of its business,” he added.
However, when it comes to the aforementioned niche plant and equipment, MVL has no choice but to buy.
“You can’t lease the FRAMECAD or MIC machines,” Musa explained.
“These products are tailor-made for the types of design-and-build projects that MVL undertakes. Our clients want structures to be erected very quickly, and these machines allow us to cater to this requirement.
“MIC Industries, for example, is a company that manufactures the Automatic Building Machine (ABM) and the Ultimate Building Machine (UBM), both of which are used for arch-span panel production,” he added.
These are specialist, heavy-duty units. The cost of a MIC Industries ABM ranges from $1mn to $1.5mn, whereas a UBM, which has a wider spectrum of applications, will set you back between $1.8mn and $2.8mn. At present, MVL owns two ABM units and one UBM.
“MIC Industries teamed up with the DoD to formulate a design that would allow buildings to sprout very quickly,” said Musa.
“Using ABM and UBM units, MVL can erect a 1km-long building with a width of 30m to 40m in approximately two weeks. Basically, you feed a two-tonne coil of structural-grade steel into one of these machines, and it will pump out arch-span panels.
“By seaming these panels together with an automatic ‘zipper’, you can put up a building in no time at all,” he explained.
MVL has gained valuable experience, both from its time as a subcontractor and as a prime contractor. This experience, contends Musa, will serve the firm well, especially at a time when the Afghan market is shifting.
“As a subcontractor, we were in line to take on more construction work, but having jumped over to the prime side, this requirement has altered somewhat,” Musa told PMV.
“In turn, our aspirations as a construction company have also shifted – or at least, are now weighted more heavily – towards being a project management prime contractor that occasionally self-peforms.
“Today, we’re not really required to be a construction firm. Instead, we hire subcontractors to conduct this work on our behalf. It depends on the territory, but we are prepared to take on more assets given the right circumstances. This won’t be in Afghanistan though, because right now, things are ramping down in that region,” he explained.
Whilst Musa expects MVL to take on more business in the Middle East and North Africa (MENA) region during the coming years, he is under no illusions as to where the company’s core competencies lie.
“Our current model and past performance is built upon defence contracts, and we wish to continue working in this space,” he said.
“Defence contracts are being awarded across the GCC, and this is the sector in which MVL has honed its skills. It would be too much of a shift for us to change strategies when we are really beginning to excel in this sector,” Musa concluded.