meed-logo

line1 line2 line3
SIGN IN / REGISTER

Ducab undaunted by global market headwinds

3 October 2024

 

Register for MEED's 14-day trial access 

The adoption of a business expansion strategy about three years ago has taken Ducab Group to new markets and opened up new industrial sectors. More importantly, the strategy has positioned the company to better withstand global economic challenges, says group CEO Mohammad Almutawa. 

Ducab Group, which is equally- owned by the Investment Corporation of Dubai (ICD) and Abu Dhabi’s ADQ, registered a year-on-year earnings before interest, taxes, depreciation and amortisation (Ebitda) of 31%, as of the end of the first half of this year. 

“The Ducab strategy has three pillars – optimisation of existing assets and businesses, diversifying our revenue streams and enhancing our organisation,” Almutawa said. 

“We still expect a record year for Ducab, whether it is from a capacity and production point of view, or from a market penetration and market expansion perspective, or from profitability,” he told MEED. 

Ducab Group recently announced that its subsidiary, Ducab Metals Business, will double its output of aluminium products from 55,000 tonnes a year (t/y) to 110,000 t/y.

Ducab Metals Business will build the new aluminium products facility in Khalifa Economic Zone Abu Dhabi (Kezad), where it already owns a 50,000 square-metre facility, the company said at a conference in Abu Dhabi on 5 September. In May, the firm signed a 50-year land lease agreement with Kezad to acquire a 51,015 sq m plot, on which it will build the new plant.

Meeting demand 

The investment in increasing production capacity will help meet rising demand for aluminium products at home and overseas, the company’s leadership said at the event titled ‘Ducab Metals Business Expansion Forum: Advancing capacity, driving innovation’, held in partnership with MEED. 

“This [production capacity] expansion will allow us to enter the AED7bn [$1.9bn] revenue club. We are moving from AED6.6bn, and adding another AED600m,” revealed Mohamed Al-Ahmedi, CEO of Ducab Metals Business. 

“We are in the hot metals line in Kezad. We are getting aluminium as feedstock from [Emirates Global Aluminium] EGA, producing it, and using Khalifa Port to export the products,” he said to MEED. 

“The new facility is expected to be commissioned by the end of the year, and we will start producing next year. The facility is in an advanced stage of construction,” Al-Ahmedi further said. 

Market challenges 

As a supplier of aluminium and copper products, as well as electric cables of various specifications to multiple industries around the world, Ducab Group is not immune to challenges prevalent in the global economic landscape.  

“The geopolitical situation has impacted us [financially],” Almutawa said. There are “difficulties arising from supply chain disruptions, competition, and shifting of capacities around the world. I will attribute this more to severe competition than economic slowdown. I think the sector [metal products] is a challenging one. There is overcapacity”, he commented.

“There is a sort of a shift of appetite from globalisation to regionalisation. Countries putting up trade barriers and tariffs. This is definitely one of the risks that we try to look at consciously,” Al-Ahmedi said.

Almutawa added: “It’s a change in the behaviour of the market. It is a challenge. Overall, the world is becoming quite small [commercially conservative].”

“While, previously, people were looking at expansions through acquisitions to increase capacities, increase efficiencies and manufacturing abilities, there is an added element of market access now, which forces you, some time, to move your investment offshore in order to secure the growth,” Almutawa further explained. 

In April this year, Ducab Metals Business completed the acquisition of GIC Magnet, a supplier of paper-insulated aluminium strips, among other products. GIC Magnet “is a UAE manufacturing entity with ties back to India. We acquired this company earlier this year and integrated it into Ducab as part of the expansion”, Al-Ahmedi stated. 

“We expect around $40m of additional revenues through this acquisition. To us, this acquisition is one of the gateways to enter into a new business,” he remarked. 

Almutawa affirmed he is eyeing targets for acquisitions as a way to grow the business. “We are looking at more acquisitions. We are looking for both organic and inorganic growth,” the group CEO revealed. 

Business growth 

Ducab Group’s portfolio mainly comprises two subsidiary companies – Ducab Metals Business and Ducab Cables Business. 

“DCB continues to focus on growing [its presence/share] in the oil and gas market and increasing its contribution. We are not supplying to the UAE and GCC only. We supply to oil and gas customers in Australia, the UK, Europe, Asia, Far East and India,” Almutawa said. 

Ducab Group has been a major supplier of equipment to the oil and gas industry since inception, and has been primarily catering to projects of Abu Dhabi National Oil Company (Adnoc Group), among other regional and global customers. 

Almutawa revealed that Ducab has won orders to supply products to Adnoc’s $17bn Hail and Ghasha sour gas megaproject and Adnoc Group subsidiary, Al-Dhafra Petroleum’s Haliba field development projects. 

“We are doing extremely well [with oil and gas customers]. We are based in an oil-predominant economy in the UAE. We have always contributed to it by providing the capabilities and diversity, and by introducing technical know-how, and by expanding our contribution to that sector,” Almutawa said. 

On the question of expanding Ducab Group’s copper segment, Almutawa said: “We are looking at further optimising our copper lines to squeeze more out of it. There are no plans for a straightforward capacity expansion.  

“In the energy sector, there is a huge transition from copper to aluminium. This does not mean that copper is going to reduce. But the usage of aluminium has increased considerably. Hence the expansion in the aluminium business. 

“Going forward, 2025 is going to continue to be a difficult year. But I think Ducab is in a much better shape to face that,”
Almutawa said. 

https://image.digitalinsightresearch.in/uploads/NewsArticle/12597510/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Dubai Municipality seeks Tasreef partner

    18 October 2024

    Dubai Municipality has issued a tender notice for a delivery partner to develop and implement a model tailored to the needs of the Tasreef programme, Dubai's planned AED30bn ($8.16bn) rainwater drainage network project.

    MEED understands the request for proposals targets technical and engineering advisory companies.

    Dubai Municipality expects to receive bids by 7 November, Fahad Al-Awadhi, director of drainage system and recycled water projects department, Dubai Municipality, said in a recent social media post.

    According to Al-Awadhi, the Tasreef  programme consists of three streamlines to enhance the effectiveness of Dubai's stormwater system:

    • Improvement of infiltration and sustainable drainage systems (Suds) and AI applications
    • Upgrade of stormwater systems in Deira, Bur Dubai and Jebel Ali
    • Proposed stormwater tunnels in Deira and Bur Dubai, as well as link tunnels in Jebel Ali

    In addition, the Tasreef programme will address storm event management, including raising awareness about storm impacts, implementing proactive risk control measures, developing marketing and procurement strategies, and establishing communication plans. 

    Al-Awadhi added: "The proposed stormwater tunnels, links and terminal pump stations aim to enhance the stormwater network’s capacity by 700% to handle up to 65 millimetres of rainfall per day. This program represents the largest rainwater collection project in a single system within the region."

    An early study is under way for Tasreef, which Sheikh Mohammed Bin Rashid Al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, approved in June, MEED reported in August

    A source familiar with the project said that Dubai Municipality is inclined to consider a public-private partnership (PPP) procurement model for the project.

    Sheikh Mohammed's approval of Tasreef came two months after a storm in April inundated Dubai, causing widespread flooding and damage to infrastructure and property in certain areas.

    The project will raise the emirate-wide drainage network’s capacity to more than 20 million cubic metres of water a day. It is envisaged to meet Dubai's needs for the next 100 years.

    The project is a continuation of drainage projects launched by Dubai in 2019, covering the Expo Dubai area, Al-Maktoum International Airport City and Jebel Ali.

    The rainwater drainage capacity through tunnels will reach 20 million cubic metres a day, with a flow capacity of 230 cubic metres a second.

    According to data from regional projects tracker MEED Projects, the Dubai Municipality Deep Tunnel Storm Water System (DTSWS) was first announced in 2014.

    It has several components, and the first two packages covering Jebel Ali were awarded between 2017 and 2018 and completed in 2022.

    The remaining packages of the master plan were on hold before the government's announcement on 24 June.

    The DTSWS project is separate from the Dubai Strategic Sewage Tunnels project, which is being developed under a PPP contracting model.  

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12753886/main.jpg
    Jennifer Aguinaldo
  • Saudi Arabia picks Ras Mohaisen preferred bidder

    18 October 2024

    A team comprising the local firms Acwa Power, Haji Abdullah Alireza & Partners Company and AlKifah Holding has emerged as the preferred bidder for a contract to develop the Ras Mohaisen independent water project (IWP) in Saudi Arabia.

    The state water offtaker received two bids for the contract in April this year.

    The only other company that submitted a proposal for the contract, Spain’s Acciona, is the reserved bidder, according to Saudi Water Partnership Company (SWPC).

    The Ras Mohaisen IWP will have the capacity to treat 300,000 cubic metres of seawater a day (cm/d) using reverse osmosis technology.

    It will also include storage tanks with a capacity of 600,000 cubic metres, equivalent to two operating days, and an electrical substation.

    The project is expected to reach commercial operation by the second quarter of 2028.

    It is initially expected that the SWRO plant will reach commercial operation by the third quarter of 2026.

    Ras Mohaisen is about 300 kilometres south of Mecca, on the Red Sea coast in Saudi Arabia’s Western Region.

    SWPC has appointed Netherlands-headquartered KPMG as the financial adviser, with UK-based Eversheds Sutherland acting as the legal adviser for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12753083/main.gif
    Jennifer Aguinaldo
  • Chinese and Saudi partners set up Hithium Manat

    17 October 2024

    Register for MEED's 14-day trial access 

    Chinese energy storage solutions firm Hithium Energy Storage Technology Company (Hithium) and the local Nabilah AlTunisi have formed a joint venture that will manufacture battery energy storage systems (bess) in Saudi Arabia.

    The joint venture is called Hithium Manat. The planned manufacturing facility has an annual production capacity target of 5 gigawatt-hours (GWh), according to an official statement.

    Hithium launched energy storage solutions designed for the region's harsh environment during a solar and storage conference held in Riyadh.

    According to Hithium, "These systems feature advanced sandstorm protection and robust high and low-temperature designs, supporting ultra-long discharge cycles of 12+ hours."

    It added that the new product line is "customised to meet the unique demands of the Middle East and Africa region".

    Nabilah AlTunisi is the founder and owner of Hithium Manat's local partner.

    "This strategic alliance will not only provide access to world-class energy storage technology but also generate local employment opportunities, stimulate technological innovation and actively contribute to realising the kingdom's Vision 2030 objectives," AlTunisi said.

    Battery energy storage market

    In August, National Grid Saudi Arabia, a subsidiary of state utility Saudi Electricity Company, awarded the engineering, procurement and construction (EPC) contracts for three energy storage systems to Riyadh-based investment group Algihaz Holding. The estimated $800m projects are located in Najran, Madaya and Khamis Mushait.

    National Grid also recently tendered contracts for the construction of five battery energy storage systems with a total combined capacity of 2,500MW across the kingdom.

    The planned facilities, each with a capacity of 500MW or roughly 2,000 megawatt-hours, are located in or within proximity of the following key cities and load centres:

    • Riyadh
    • Qaisumah
    • Dawadmi
    • Al-Jouf
    • Rabigh

    Every utility in the region is procuring or planning to procure bess capacity in light of growing intermittent renewable power in their grids. 

    The overall capacity of deployed bess globally is expected to reach 127GW by 2027, up from an estimated cumulative deployment of 36.7GW at the end of 2023, a GlobalData report issued in June said.

    The report cited Chinese companies BYD and CATL and South Korean companies LG Energy Solutions and Samsung SDI among the top battery technology providers globally.

    Related read: Battery storage gains foothold

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12742375/main.jpg
    Jennifer Aguinaldo
  • Kahramaa invites Ras Laffan substation bids

    17 October 2024

    Qatar state utility General Electricity & Water Corporation (Kahramaa) has tendered a contract to upgrade the Ras Laffan C substation.

    The scope of work covers the upgrade of existing 220-kilovolt (kV) and 400kV substations and the addition of 220kV gas-insulated switchgear bays and an 800-megavolt amps transformer.

    Kahramaa issued the tender on 15 October and expects to receive bids by 28 November.

    The project bid bond is valued at QR1.5m ($410,000).

    Separately, Kahramaa invited firms to submit their proposals for a contract to supply and install power transmission and distribution equipment, including providing and connecting substation main earth and equipment earthing, commissioning fitted substations and pre-commissioning protection testing for 11kV switchgear panels.

    Kahramaa expects to receive bids for this contract, with a bid bond of QR3m, by 14 November.

    Kahramaa is expanding its power generation capacity. Negotiations are under way with the sole bidder led by Japan's Sumitomo Corporation for a contract to develop and operate Qatar’s Facility E independent water and power producer (IWPP) project.

    The Facility E IWPP scheme will have a power generation capacity of 2,300MW and a water desalination capacity of 100 million imperial gallons a day.

    Earlier this month, Qatar Electricity & Water Company announced plans to develop a 500MW peak power unit in Qatar's Ras Abu Fontas area.

    Construction is also under way for two solar farms with a total combined capacity of 875MW in Mesaieed and Ras Laffan.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12742343/main.jpg
    Jennifer Aguinaldo
  • Neom starts Tabuk highway prequalifications

    17 October 2024

     

    Saudi Arabian gigaproject developer Neom expects firms to submit their prequalification applications for a project to build a mountain road near Tabuk later this month.

    The 11.5-kilometre (km) Tabuk mountain road project comprises a 4km tunnel and 7.5km dualisation of an existing road, according to an industry source.

    Neom expects to receive statements of qualifications from interested engineering, procurement and construction contractors by 29 October.

    The tender proceedings for Neom's transport infrastructure projects are gathering momentum.

    Neom received expressions of interest for a contract to build a coastal highway and infrastructure project catering to the Magna development on the Gulf of Aqaba on 15 October.

    The project, called Magna Infrastructure Packages, is split into three. Package one is 13km, package two is 42km and package three is 41km. The packages cater to the development’s north, central and south areas.

    The design-and-build project covers utilities for water, power, mobility, sewer, buildings and highways, in addition to the coastal highway. The project is expected to be completed by 2027.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12738632/main.gif
    Jennifer Aguinaldo