Tech Group to list on DFM
The Tech Group, which started with Piling Tech in 2003 with a paid-up capital of Dh500,000, is now a group that owns nine companies, all specialised in the field of construction.
The group, a private firm headquartered in Ajman, was established as a mother company in November 2006 and it has grown in a short space of time with assets now estimated at Dh207 million.
In addition to piling, the companies provide foundation blocks, groundwork, ready-mix cement, wood and glass, aluminium and ceramics for construction work.
CEO of Tech Group Ali Ghaleb Jaber talked to Emirates Business about the group’s expansion plans, which include forays into Ras Al Khaimah, Oman, Turkey and India. Jaber cited the shortage of workers as the main challenge to growth.
What are the companies that operate under the umbrella of Tech Group?
Our companies meet all the requirements of the construction sector through Construction Tech, Remix Tech, Piling Tech, Aluglass Tech, Block Tech, Wood Tech, Ceramic Tech and MEP Tech.
And through Property Tech we will start developing projects worth Dh2 billion in Ajman, Turkey and India this year.
What challenges did you face in 2007?
Competition was a major challenge and to keep ahead we focused on offering high quality and retaining only highly skilled workers.
Have you faced any shortage of workers and did it pose a challenge to your expansion plans?
Yes indeed, shortage of workers has been a hurdle in our ambitious expansion plans.
Unlike the well-established construction companies, growing businesses are not receiving any assistance in terms of meeting their requirements of workers.
What support do you expect from the government to bolster your business?
I think the government should take this [shortage of workers] into consideration when sanctioning the number of workers requested by companies.
Giving special consideration to fast-growing businesses would enable better operation and execution of expansion plans.
You said your group retains only highly skilled workers. Do you think recruitment agencies have failed to bring in such staff?
In many cases recruitment agencies have supplied workers who do not have experience for the required jobs. We had to send them back and bear the cost. This is apart from workers being subjected to cheating by oversees recruitment agencies.
What solution would you suggest for the labour problem?
I think the government should take over the responsibility of supplying workers. It would help supply skilled workers, in addition to maintaining their welfare.
The government has already taken major initiatives towards controlling the labour market, including the payment of workers’ salaries through Emirates Post and imposing the mid-day break rule in the two months of summer in July and August. This is highly appreciated by us as employers. Initiatives to supply workers to construction companies would help meet our needs more efficiently.
What were Tech Group’s profits in 2007?
Each of the nine companies has made different percentages of profits. The group made Dh550m in revenue and Dh120m in profits in 2007 and this was about a 25 per cent increase in profits compared to 2006.
What are your projections for 2008?
Taking into consideration the construction boom in the UAE and the Middle East and the potential the group has, we are expecting to double our profits to Dh24m and Dh1.1 billion in revenue in 2008.
What are your expansion plans for 2008?
We entered Oman last year. This year we will set up three factories for blocks and concrete with a Dh200m capital to better serve the booming property market there.
We will also set up a company in Al Manama in Ajman for renting out heavy construction vehicles and machines with a capital of Dh100m and this will also help us enter Ras Al Khaimah and the other Northern Emirates markets.
We are also developing properties in the UAE, Oman, Turkey and India.
How many workers will you need to meet the group’s expansion plans this year?
We need to have at least 5,000 workers and I hope we will receive the necessary staff to help execute our ambitious plans.
Do you have plans to increase the group’s capital for these expansion plans?
We will increase our capital with Dh300m. Our target for this year is to make at least a 35 per cent increase in profits.
How do you rank the group?
We place our group among the largest five firms in the UAE in terms of capital, assets and production capacity. We have grabbed a significant chunk of the GCC construction market and are looking forward to further expansions.
We started with one company in 2003 with a paid-up capital of Dh500,000 and expanded into a group of nine companies in November 2006 with Dh50m in capital. Now our assets stand at Dh207m.
Are you planning to launch an initial public offering (IPO)?
No doubt, we are planning to list on the Dubai Financial Market (DFM) in the next few years and announce an IPO.
This will give a chance for the public to be part of an ongoing successful business and also help us to increase our capital to help expand our group further.
How do you value the construction sector in general?
I can say that for the next 10 to 15 years the UAE property market will continue to grow with an annual growth rate of between 10 per cent and 15 per cent.
The fast-growing property markets in the Middle East and North Africa region will also continue attracting investment. This high potential prompted us to consider expansions. Our diverse construction-related services will help us grab a big piece of the property cake.
What are the major projects the group is involved in?
Our companies have contracts to meet the needs of major developments and towers in Ajman such as the ongoing Emirates City (R Holding); Ajman One (developed by Akaar); Ajman Marina (Tanmiyat); Ajman Green City (Eslam Group); Ajman Uptown (Sweet Homes); Garden City and Ajman Pearl (Real Estate Investments).
Outside the UAE, we were involved in Qatar for piling work, Oman for concrete work and India as developers.
How will you meet the needs of a huge development like Emirates City?
We are working to meet the requirements of developers and reduce the time consumed in transport. For example, we have set up a ready-mix factory in Emirates City on our land there especially to help meet the needs of more than 90 towers under construction. This factory alone has a 300 cubic metres per hour capacity.
And to meet the increasing demand for piling and foundation works, Piling Tech has recently acquired 11 Italian foundation-making machines worth Dh45m. This will lead to faster completion of foundation construction.
Apart from piling, block and concrete works, is the group’s construction subsidiary involved in projects in any other developments?
Construction Tech has been commissioned to develop three towers the Paradise Lakes Towers – worth Dh250m in Emirates City. It is also carrying out projects worth Dh4bn in some of the other projects in Ajman such as Garden City.
You have said that the group has a property subsidiary. Can you describe some of your developments?
We have not yet started any developments. But this year Property Tech will construct towers on land we have already purchased and worth a total of Dh2bn each in Ajman, Turkey and India. We are also considering investing in Sudan and Libya.
Ali Ghaleb Jaber, Chief Executive Officer of Tech Group
Ali Ghaleb Jaber was raised in Canada but he has deep roots in the UAE as his father was a financial adviser to the Ruler’s Court of Ajman.
The young executive is an alumnus of the University of Ottawa in Canada and a graduate of Ajman University of Science and Technology with a bachelor’s degree in business administration and marketing.
Today, he is in charge of running the group, an umbrella of nine companies. He has been working in the construction sector since 2005.
Dh500,000: the capital of the start-up company of the Tech Group in 2003
Dh50m: the capital of the Tech Group in November 2006
Dh120m: net profits in 2007. The total revenue stood at Dh550 million
25%: the rate of increase in profits last year compared to 2006
Dh300m: Increase of capital planned in 2008. A DFM listing and an IPO are planned
Dh240m: Net profit expected this year. The revenue forecast is Dh1.1 billion
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