Gulf Industry

Sabic to build POM plant

Sabic has concluded an agreement in Houston, USA, with the Celanese Corporation for the construction of a 50,000 tonne polyacetal (POM) production facility at the complex of its affiliate, National Methanol Co (Ibn Sina) in Jubail Industrial City, Saudi Arabia.

Engineering and construction of the facility is expected to begin by 2011. The facility is envisaged to go on-stream by 2013, using methanol already being produced by Ibn Sina. This represents a key feedstock for the production of POM, an engineered performance chemical product specifically used in automotive industries as well as in mechanical and construction fields. It also has many other industrial applications.

The new facility will boost Sabic�s position in the performance chemicals industry as an important part of its 2020 strategic plan. It also provides wider prospects for the Saudi national downstream industries to enter automotive and other advanced industries.

Ibn Sina, founded in 1981, is a leading producer of methanol and MTBE. Sabic owns 50 per cent of its capital while Celanese and an affiliate of Duke Energy Corporation each hold a 25 per cent interest in the venture. Total invested capital in the project is expected to be around $400 million.

New catalyst helps PP production

Sabic has announced it has developed a more advanced technology for the manufacture of polypropylene (PP). This is a fourth-generation catalyst which can be used in several vital applications, the most important of which are packaging, carpets, piping and automotive parts.

�This catalyst is a technological breakthrough, being the first of its kind developed in the Gulf and Middle East,� Sabic said in a statement.

�Experiments conducted by Sabic at its plants in Saudi Arabia and Europe confirm the catalyst�s ability to provide impressive results, making it superior to other catalysts currently used in the same area. This discovery will contribute to increased productivity, enhanced quality and new product development. It opens many windows for possible future application,� it added.

The new catalyst has been applied commercially in the Sabic affiliate, Saudi European Petrochemical Company (Ibn Zahr), and has demonstrated superiority over the previously used catalyst. By using the catalyst, production reached nearly 30,000 tonnes of polypropylene as at end of March 2010. This quantity was sold to local and international markets.

Zamil courses

Zamil Industrial Training Center (ZITC) recently developed and conducted a wide-range of employee and college student education and training programmes designed to meet the needs of the labour market and various Zamil Industrial business units.

Dr Mohamed Abdulla Sharif, ZITC manager, recently reported on the centre�s achievements.

Newly recruited Saudi employees of both Zamil Steel and Zamil CoolCare participated in four- to six-month-long certificate programmes designed to enhance the skills and abilities of the 150 participants. They successful completed the following programmes: Certificate in Welding Technology, Certificate in Fabrication Technology, Certificate in Machine Operation and Certificate in Refrigeration and Air Conditioning Technology.

Dr Sharif emphasised that the programme structure for each of the above specialisations contained common subjects such as workshop calculation, English language, work ethics, safety and technical drawing. These core studies were specifically included in the training programmes in order to help the employees learn the material pertinent to their specialised subjects more efficiently, and to develop a work ethic that meets industrial standards, equipping them to function successfully in their chosen career fields.

In addition to these programmes, the Training Centre developed and conducted a variety of single, specialised training courses for Zamil Industrial employees. More than 540 employees received classroom and laboratory training and instruction.

Dr Sharif stated that 340 Saudi employees attended various courses in 2009. They were given development opportunities.

Additionally, 36 newly recruited senior employees including managers, supervisors and engineers were trained.

On-the-job summer and cooperative training programmes were held for 70 Saudi students from a number of Saudi universities and colleges.

Energy bank happy with results

Bahrain-based First Energy Bank (FEB) announced profits of $14.2 million, total revenues of $47.8 million and total assets of $1.23 billion during its annual general meeting.

Chairman Esam Yousif Janahi and CEO Vahan Zanoyan declared themselves satisfied with the results.

The bank, established in 2008, launched Saudi Polysilicon, the largest polysilicon facility in the Middle East, in the following year in partnership with Saudi Project Management and Development Company. A significant develop- ment of 2009 was the closing of books of MENAdrill, an offshore drilling venture, whose two rigs will become operational later this year.

FEB acquired in 2009 a 9 per cent stake in the Al Dur independent water and power production plant, and finalised a 40 per cent acquisition of Arab Drilling and Workover Company (Adwoc), a leading Libya-based onshore oil and gas well drilling and maintenance company from Global Santa Fe.

FEB operates as an Islamic investment bank in accordance with sharia principles. It was established with an authorised capital of $2 billion and its shareholders include financial institutions, a range of other organisations and individuals with interests in the energy sector from Bahrain, the UAE, Libya, Saudi Arabia and other countries in the region.

�The volume of our business is constantly growing and our investments are making steady and sure progress,� said Janahi.

�The coming year looks like it is going to be ripe with potential investment opportunities in the energy sector, especially with regards to renewable energy, oilfield services and the multitude of energy-related businesses. We are well-placed to continue taking advantage of these opportunities and look forward to another bright year.�

Zanoyan commented: �2009 was without doubt one of the most difficult years the banking industry has seen in a long time. That FEB succeeded in achieving such good financial results during those difficult times shows the strength, dedication and vast experience we have as a group.�

Plastics sector to grow 30pc

The Middle East plastics industry will grow 30 per cent annually over the next five years according to the chief of a company organising a major plastics event in Cairo.

Ahmed Ghozzi, chairman of ACG-ITF, organiser of Plastex 2010 due to take place in mid-May, also said the Mideast remained the largest source of plastic raw material with up to 16 per cent of the region�s abundant petroleum supply not used for energy production being converted into other materials such as plastics.

Ghozzi said more than 580 downstream plastic manufacturers operating in Saudi Arabia were awaiting the latest developments in plastics machinery and technologies.

Egypt�s consumption of plastic materials and resins had been estimated at nearly $1.6 billion while demand was expected to grow at 10 per cent annually for the next three years in line with the increasing number of newly established factories, said Ghozzi. He said the plastics sector in the North Africa region had sustained double-digit growth in 2009.

The plastic industry has seen sustained growth levels in the region as Middle East and African markets were expected to deliver �noteworthy gains� from 2009 to 2014, he said citing an industry report from the American Chemistry Council.

Plastex (May 13-16) will be held concurrently with Egyplast 3, a sub-event that provides opportunities to optimise exports of Egyptian manufacturers.

Ducab eyeing 25pc of GCC market

Ducab, which claims a 50 per cent share of the UAE market, says it is aiming to gain 25 per cent of the cable market in the GCC region in the near future.

The company registered sales of Dh2.4 billion ($653 million) in 2009 following a series of expansions within the GCC market.

Managing director Andrew Shaw said Ducab focused during the year on customer service and committed additional resources towards expanding output and gaining operational excellence in order to penetrate new international markets.

The company completed several landmark ventures that year including the establishment of a special cables unit dedicated to the oil, gas and petrochemicals sector, an expansion of the Ducab Connect range, and widening of the product portfolio of Ducab copper rods. It also formed Ducab HV (high voltage cable systems) jointly owned by Dewa and Adwea.

Sales during 2009 were �positive� in countries such as Qatar, Saudi Arabia, Oman and India, he said. Ducab�s copper manufacturing and marketing activities were particularly successful in the GCC and Asian markets, with the company overtaking competition in India to become the largest provider of imported copper rods in the country. Some 25 per cent of the cable and enameled wire manufactured in India with imported copper now uses Ducab copper.

�This last year was a very challenging period worldwide, although infrastructure projects can be counter-cyclical in a downturn as governments spend money in order to stimulate economic activity,� said Shaw. �The Middle East as a whole remained a strong market for Ducab in 2009, and today we believe that customer service is without a doubt the most important aspect of our business. By investing in our products and our partners alike, Ducab will continue to offer reliable cables solutions to its clients whilst contributing to the growth of the national economy,� added Shaw.

Some of the major UAE projects that Ducab supplied cables to in the last few years were inaugurated in 2009, including the Burj Khalifa and the F1 Yas Marina Circuit, involving collaborations with companies like ETA and Siemens. For the F1 Yas Marina Circuit alone nearly Dh100 million worth of power cables solutions were sourced from Ducab.

Ducab HV, now under construction, is expected to become operational by early 2011.

Asscom happy with Dubai business

Asscom Middle East, based in the Dubai Airport Free Zone and active in the aviation repairs and maintenance sector, recently reported a turnover of Dh19 million ($5.7 million).

The company, which began operations in 2009, is a subsidiary of Hamburg, Germany-based Asscom and is certified by Airbus. It holds General Civil Aviation Authority (GCAA) and European Aviation Safety Agency (EASA) approvals.

�Repair and maintenance is only slightly affected by the economic downturn as aircraft equipment and systems require regular maintenance,� said Peter Wiggers, managing director of Asscom.

To cope with the burgeoning business Wiggers said future expansion plans would include an increase in the number of staff and size of the premises (office, storage and repair facilities) and provision of additional aviation after-sales services including non-avionic repair services.

Asscom has service centres in the Far East and USA besides the Dubai service centre.

Steel project moves forward

Work is to begin soon on a $1.2 billion integrated steel production facility in Bahrain following the signing of EPC contracts.

Foulath subsidiary United Steel Company�s (SULB) facilities will include a direct reduction iron (DRI) plant plus a melt shop (MS) and heavy section rolling mill (HSM).

The DRI plant will have a nameplate capacity of 1.5 million tonnes per year (tpy) but with capability to produce 1.8 million tpy. The MS and HSM facilities will have a nameplate capacity of 800,000 tonnes annually and capability to produce 1 million tpy.

Kobe Steel with Midrex will construct the DRI plant whilst SMS Meer, SMS Concast and Samsung will jointly develop the MS and HSM facilities.

Bahrain-based Foulath (Gulf United Steel Holding Company) holds 51 per cent of SULB�s shares with Japan�s Yamato Kogyo Co holding the remainder 49 per cent.

Construction will begin in the second half of 2010. Commercial operations and the production of medium and heavy beams and structural sections will commence by the second half of 2012.

The new complex will be situated adjacent to Gulf Industrial Investment Company�s (GIIC) pelletising facilities and United Stainless Steel Company�s (USCO) cold rolled stainless steel mill in the Hidd Industrial Area. Both GIIC and USCO are fully owned subsidiaries of Foulath, the Middle East�s leading steel investment vehicle and holding company.

TCC has diversification plans

Jubail-based Technical Contracting Company (TCC),� currently undertaking indust- rial protective coating and fire and water proofing, plans to diversify into the construction and maintenance field, the company spokesman said.

�The intention is to bag orders in mechanical, electrical and piping projects,� the spokesman said, adding that the plan is in the preliminary stage of execution.

TCC applies protective coats on surfaces including pipes, tanks, heat exchangers, transformers, steel and concrete structures. It introduced the fire and water proofing service less than a year ago.

TCC stresses it is committed to quality and corporate responsibility. For all services, TCC takes into consideration the highest quality standards as well as compliance to customers specifications, applications and painting & coating standards.

Technical Contracting Company was founded in 1992 and soon achieved success in the protective coating and painting industry. It has accreditations from Saudi Aramco, SCECO, Sabic and the Royal Commission of Jubail and Yanbu.

To gain a bigger market share, TCC joined the Abdullah Fouad Group of Companies in 2008.

TCC�s shareholders are Sheikh Abdullah Fouad and Mohammed S Abubshait.

The company is eyeing projects in neighbouring Gulf states and opened a branch in Qatar in Q3 2009 and another branch in Bahrain in the last quarter of the year.

Rakia on the go

The Ras Al Khaimah Investment Authority (Rakia) has announced that 2009 was a prosperous year with 880 onshore and 885 offshore licences issued.

Rakia is a major provider of investment opportunities and one-stop solutions in its free zones, industrial parks and offshore facilities as well as in real estate developments and other ventures.

In terms of onshore licences, 35 per cent were achieved in the Q4 alone when considerable growth was observed. On the basis of the January and February 2010 results growth is expected to continue, Rakia said. The investment attracted came mainly from the UAE (14 per cent), Middle East (15 per cent), Europe (24 per cent), India (26 per cent) and Asia (9 per cent). The US and CIS countries also accounted for some of the investments.

Rakia caters to free zone and non-free zone licences and on- and offshore for all types of businesses. Investors can lease land to build their own facilities � be it factories, warehouses, offices or altogether � or rent office facilities at Rakia�s Amenities Centre.

The Authority recently introduced a concept of zoning for its industrial parks so as to provide bespoke infrastructure and utilities at minimal cost and satisfy the needs of the various industrial sectors, complementing each other and benefiting from mutual synergies, ultimately enabling them to be competitive in their market.

Parks planned

Saudi Arabia plans to set up at least six more large industrial parks and hand out contracts worth up to $1.6 billion to equip them as part of efforts to diversify the economy away from oil, a government official said.

The top Opec exporter is trying to lower dependence on oil and build up new industries as the kingdom has to speed up job creation for a rapidly rising young population.

Saudi Arabia is rolling out investments worth $400 billion until 2013 to upgrade infrastructure, build roads, power plants, utilities or universities.

To attract investments, the government is creating so-called industrial cities across the kingdom which will offer cheap leases and other subsidised government services.

The total area of parks will rise to 71 million sq m in a first step and later to more than 100 million sq m, up from 42 million, said Tawfig Fozan Al-Rabiah, head of the Saudi Industrial Property Authority which develops the industrial zones.

The government wants to offer tenders worth 5-6 billion riyals ($1.3-$1.6 billion) in the next five years to equip these cities with services such as housing compounds or utilities, Al-Rabiah told Reuters.

Contracts would be signed on a build-operate-transfer basis under which an investor typically runs a project for the government over a limited period of time.

�We have started development of six new cities and possibly expand some old cities. The total area that we are adding now ... is 60 per cent to what we have developed over the past 40 years,� he told Reuters in an interview.

Dubal registers record sales

Dubai Aluminium Company Limited (Dubal), the world�s largest modern smelter with a captive power station, sold a record 1,001,257 metric tonnes of cast primary aluminium products internationally in 2009.

Approximately 24 per cent of the total volume was shipped to Europe, maintaining Dubal�s market share in the region, a statement said.

Sultan Al Sabri, general manager marketing and sales, Europe and North America, attributed this success to a number of factors, notably a concerted effort by Dubal to support its customers throughout the downturn via initiatives such as altering the supply chain.

He also highlighted placing consignment stock in warehouses closer to customers and developing creative solutions for order placement and delivery; and availing flexible credit options.

The Dubal office in Zurich, established in 2008, also contributed substantially, by enabling the company to gain deeper understanding of the changing dynamics far quicker than before.

�These strategic interventions, designed to build on our existing long-standing customer relationships, strengthened Dubal�s position in the market,� said Al Sabri.

�Having weathered the storm strongly, we have demonstrated Dubal�s sustainability, and are more confident than ever of our ability to increase sales volumes to this important market in the future.�

Al Sabri said that the volumes of Dubal metal sold into Europe will be raised to 27 per cent of the company�s projected total sales in 2010 (projected to exceed one million tonnes again).

US fodder facing Gulf challenge

US farmers are shipping hay and grasses all the way to the Arabian Gulf but before long states in the region will challenge them, a senior official of a UAE firm says.

�The UAE and other Gulf countries are investing in agricultural land in countries such as Egypt, Sudan, Pakistan, Kazakhstan and Azerbaijan to grow fodder and they will begin to challenge US companies,� said Marwan Barakat, general manager of the Middle East Group of Companies, which has been importing fodder from different parts of the world for 20 years.

�Fodder from the US is currently cheaper and of better quality and Saudi Arabia, Qatar, Bahrain and Kuwait are all looking at placing orders, That could change in the next two or three years, however,� he said pointing to supplies that would be forthcoming from GCC farms overseas.

In the meantime, US farmers have captured half of the burgeoning UAE market for hay and grasses. That market is worth between $250 million and $500 million a year, say industry traders.

US and Canadian grass producers turned out in force at Agra Middle East, the region�s biggest agricultural business trade show held in late March at the Dubai World Trade Centre and opened by Rashid Ahmad Bin Fahad, UAE Minister of Environment and Water.

�Southern California farmers are now shipping around 500,000 tonnes of grass fodder a year to the Arabian Gulf,� said Gregory L Braun, president of Border Valley Trading. �This is a trade that simply did not exist on this kind of scale two years ago but we have a lot of capacity to produce even more,� he added on the sidelines of Agra Middle East.

Venture to cut carbon footprint

A partnership has been struck between a Middle East firm and a Swiss foundation to help UAE companies minimise their environmental impact by offsetting carbon emissions and reducing or replacing where possible their use of fossil fuels.

The partnership is between facilities management company Farnek Avireal and the non-profit foundation Myclimate, which is making a contribution towards climate protection and sustainable development.

Farnek Avireal is a joint venture company between the Khalifa Juma Al Nabooda Group of the UAE and Avireal AG of Switzerland.

Partners and clients of Myclimate worldwide include large, medium and small businesses from across a range of industries. Among the many high-profile international companies involved are Volvo, Virgin Atlantic, HSBC, Lufthansa and Hyundai.

�This initiative complements the Ecological Footprint Programme of the UAE, the aim of which is to develop environmentally friendly policies, reduce the UAE�s carbon footprint and move towards a sustainable future,� said Marcus Oberlin, general manager of Farnek Avireal Middle East.

Speaking about regional opportunities and their partnership with Farnek Avireal, Ren� Estermann, CEO, Myclimate, said, �We first attended the World Future Energy Summit two years ago in Abu Dhabi and witnessed great regional interest. In Farnek Avireal we have found a partner that we consider to be the market leading consultant in the UAE for carbon reduction and sustainability.�

R+T Mideast widens offerings

R+T Middle East has opened up unprecedented direct access to world-class expertise and the most modern solutions in the critical areas of sun protection, access control systems, and doors and gates, its organisers say.

Deutsche Messe Dubai and Messe Stuttgart, the joint organisers, are in the final stages of wrapping up preparations for the only specialised trade show dedicated to roller shutters, sun protection, doors and gates in the Middle East and North Africa (Mena) and due to open in May.

�R+T has generated great interest among key players in the region�s construction sector,� they said.

With an estimated $540 billion in construction expenditure from 2009 to 2011, the UAE maintains its position as a potential market for trade participants of R+T Middle East followed by Saudi Arabia ($397 billion), Kuwait ($123 billion) and Qatar ($99 billion), the organisers said.

R+T Middle East will be held from 10-12 May 2010 at the new halls of the Dubai International Convention and Exhibition Centre.

Angela Schaschen, managing director, Deutsche Messe Dubai Branch, said the GCC had been a very important growth market for sun protection, doors and gates and access control systems because of the relatively large number of real estate projects being developed in the region.

Board confident on Alba output

>Aluminium Bahrain (Alba)�s board of directors expressed confidence in the company�s ability to meet its production targets in 2010, achieve greater operational efficiency and take necessary steps to improve its global competitiveness.

The board issued the statement during its first quarterly meeting of 2010.

It approved the purchase of Breton Investment shares by Alba. The ownership of these shares will be split between Bahrain Mumtalakat Holding Company and Sabic based upon their respective ownership levels.

The board also announced the appointment of Isa Al Ansari as chief supply chain officer.

Isa Al Ansari will be reporting directly to the chief executive and will be a new Bahraini member of the executive team after the organisational restructure. He has served Alba for more than 25 years and risen through the ranks from apprenticeship to his current position as manager (procurement).

Alba chief executive Laurent Schmitt announced the appointment of Mahmood Al Nasheet as the new head of corporate communications in Alba�s public relations department.

A Bahraini national, Al Nasheet has been with Alba for many years and brings with him vast experience in the field of public relations and corporate communications.

In other Alba developments, the British Safety Council once again conferred its International Safety Award for 2009 on the company for the fourth consecutive year.

Second prestigious award
This will be the second prestigious award that Alba has won this year. Weeks earlier it had garnered praise for having won the RoSPA Occupational Health and Safety Award, also, for the fourth time.��

The British Safety Council, which was founded in 1957, is one of the world�s leading health and safety organisations whose mission is to keep people healthy and safe at work.

Alba�s chief operating officer Mohammed Mahmood was preparing to receive the top Middle East Organisational Leadership Award in the Manufacturing Sector at the very first Middle East Business Leaders Summit & Awards 2010 scheduled for late April in Dubai.

Mahmood was nominated for the award by a distinguished panel of judges comprising some of the region�s foremost industry leaders. He was recognised for demonstrating leadership in strategic thinking and for being able to efficiently execute strategy, inspire and engage people to get things done and develop a longer-term action plan for achieving success.

Al Ansari, Mahmood and Al Nasheet

In Brief

SeAH Steel to build plant
South Korea�s SeAH Steel Corp has leased land from Ras Al Khaimah Investment Authority (Rakia) to build a manufacturing plant within Rakia�s Industrial Park.

The successful manufacturer of steel pipes, tubes and fittings with overseas businesses in the US, Japan, China and Vietnam and a global sales network, decided to expand into the Middle East and Africa market by operating a large production plant in the UAE with excellent infrastructure facilities and distribution channels to reach and export to the entire region.

�Within the coming three months we want to start construction on our production plant and are planning to be fully operational within a year from now,� stated Won-Ho Jang, manager, strategic planning team of SeAH Steel Corp.