Ducab eyes Africa expansion
Dubai Cable Company (Ducab), a leading UAE-based cables manufacturer, is looking at African markets as it aims to expand geographically, its Managing Director said.
Speaking to Emirates 24l7, Andrew Shaw said: “We have set ourselves a strategy to grow geographically so we need to be in more markets… Geographically, we see Africa as a market with real opportunities.”
In a bid to expand to other markets, the company recently acquired UK-based AEI Cables, one of the oldest cable makers in the world, which helped it expand Ducab’s product range, access to specialised expertise and providing point of entry into the European market.
Dubai Cables now has presence in all GCC countries, Hong Kong and recently opened sales office in Nigeria. “We see Dubai’s location as a gateway to African markets. We have a lot of African customers who come to Dubai,” he added.
Eyeing construction projects
To grow organically, the company hopes to benefit from the multi-billion dirham real estate projects announced recently in the UAE.
“We are very optimistic for this year but the first quarter is a little bit slower than we would have liked. We are seeing a lot of activity especially in the UAE and GCC as well. We need projects to be announced and awarded, work to start on site before we can really begin to see the cable demand,” Shaw added.
“We follow the construction cycle, so when construction turns down we of course are directly affected… Utility firms like Dewa and Abu Dhabi Distribution Company were (our) strong customers, investing throughout the recession; they were very strong and consistent through 2013,” Shaw said, adding that 2013 was a pretty good year and the company had good volume growth across all of its business.
According to figures released by Meed, more than $23 billion worth of projects were awarded in the construction sector in 2013 while $59bn contracts were awarded the GCC countries. Furthermore, $12bn worth of stalled property projects have resumed over the past 18 months.
Ducab last year won contracts to supply cables to Abu Dhabi Airport Mid-Field Terminal, Louvre Museum, Barakha Nuclear Plant and Dh600-million contract for Abu Dhabi distribution utility.
Over the past five years, according to Shaw, the company has been broadening away from its core product range.
“What we have been doing over the past five years or so are broadening away from our core product range of construction cables; so we have opened a special cable unit to do oil and gas cables, then we went into high voltage here to go into top-end previously imported cables. Now this acquisition will help us to sell a whole range of new cables,” Shaw added.
Shaw said Ducab was the first company in the world to develop cables that passed all the tests of Barakha nuclear plant with whole new level of specifications that Emirates Nuclear Energy Corporation (Enec) had insisted on for the nuclear power station.
“Previously cable was 40-year guarantee life, Enec insisted even on higher life for Barakha. We were the first cable company in the world to approve 60-year life and the first delivery of cable actually went out in January-February 2014,” he said, adding that “we have been supplying a lot to oil and gas companies… We are up against the international majors, we fight toe to toe with them.”
2013 Sales jump 22% to Dh5 billion
Ducab revenues in 2013 increased 22 per cent to Dh5 billion on the back of strong demand locally and abroad.
Cable sales rose 14 per cent to Dh2.9 billion, sales of rod and wires from Ducab’s Copper Rod Plant rose 34 per cent to Dh2.1 billion, and high voltage cable sales reached Dh122 million, a huge increase of 660 per cent.
Ducab’s Chairman Jamal Salem Al Dhaheri said: “The positive results achieved by the company over the last year is testament to the strong leadership, the innovative culture, and the ability to identify and move towards market trends. As an entirely UAE-owned company, we find many parallels with the growth and success of our nation, and remain committed to representing the UAE as we grow.”