A UAE company has allied with an international construction firm to set up a plasterboard plant in Abu Dhabi at a cost of more than $50 million (Dh183.5m) to take advantage of a surge in regional demand.
The plant in the sprawling Musaffah industrial area is the first of its kind in the Gulf and will have an initial production capacity of nearly 30m tonnes per year, according to its promoters.
Sultan International, owned by Sheikh Sultan bin Hamdan Al Nahyan, and Saint-Gobain Gypsum Middle East, an affiliate of the French Saint-Gobain Group, have created the joint venture – Saint-Gobain Gyproc Emirates – to own and operate the project that will be completed next year.
“Phase one of the factory will be completed in January 2009 at a cost of Dh183m and will sell 30m square metres of plasterboard per year. It is expected that 30 to 50 per cent will be exported to the GCC states, the majority being for UAE consumption,” said Stephen Ede, Managing Director, Saint-Gobain Gypsum Middle East.
“The project has been prompted by a surge in demand for this substance in the region. The Gulf plasterboard market has been increasing at 30 per cent per year well above the 1.5 times gross domestic product that we see in most markets. Today the GCC demand is 50m square metres of plasterboard, of which the UAE is 50 per cent,” Ede told Emirates Business.
He said the second phase of the project would involve the construction of a ready mix joint filler factory on the same site as the plant.
“The engineering study for this is currently under way. The demand for accessories such as joint filler is also growing very fast and has become more urgent to ensure that Saint-Gobain provides a complete offering with proven performance.”
Ede said the project will benefit both Saint-Gobain and the UAE as it is the company’s first plasterboard plant in the region and will support economic diversification and job creation programmes in the Emirates. He added that the plant would prompt Saint-Gobain to set up more projects in the UAE.
“For the UAE, the factory will provide more than 100 long-term manufacturing jobs as well as many indirect jobs for support and services required to operate the factory. It will also generate export sales revenue and the import of foreign capital. Manufacturing has its part to play in any well-balanced economy, and Saint-Gobain is pleased to have chosen Abu Dhabi and Sheikh Sultan bin Hamdan Al Nahyan as its partner,” he said.
Ede said in order to meet regional demand, Saint-Gobain imports 20m square metres of board per year into the GCC from Thailand and Malaysia. “The logistics effort, shipping costs and import duty for bringing 1,000 containers per month here is large. A local factory will provide better availability, local support and more value to our customers. With the factory we will have an architect/consultant support centre in order to raise building standards through higher specifications. In parallel we will operate a contractor training school,” he said.
UAE’s first plasterboard factory to cost $50m