The industrial enclave around Khalifa Port has grown in leaps and bounds, contributing significantly to Abu Dhabi’s vision of economic diversification
Investments at Khalifa Industrial Zone Abu Dhabi (Kizad) went a notch up with plans by major business promoters to build an aluminium rolling plant there at a cost of Dh440 million ($119.7 million).
The new plant, Emirates Rolling LLC (Emiroll), is a joint venture between Dubal Holding (DH), which has a 35 per cent stake, Dubai Investments (DI) (30 per cent) and Mars, a Singapore-based industrial group (35 per cent).
DH is a subsidiary of Investment Corporation of Dubai (ICD) focused on investing in energy, commodities and industrial projects, while DI is a leading diversified investment conglomerate listed on the Dubai Financial Market with nearly 20,000 shareholders and a paid-up capital of Dh4 billion. Incorporated in 1995, DI has grown exponentially with investments in a number of businesses across the core sectors of real estate, manufacturing and financial investments.
As part of the joint venture, Mars has also committed to a 30 per cent product off-take from Emiroll for application and use across its Middle East operations. The remaining volume is expected to be supplied for domestic consumption and exports to the Middle East and Europe.
Once operational, Emiroll will manufacture 65,000 tonnes of aluminium coils per year, including 45,000 tonnes of cold-rolled and 20,000 tonnes of hot-rolled aluminium for applications in downstream industries such as automotive body parts, roller-shutters, garage castings, container trays, cans and aerosols.
GCC currently manufactures 4.5 million tonnes of primary aluminium annually with the UAE’s share about 2.3 million tonnes and only 10 per cent of the regional production used by downstream industries.
Abdulnasser Bin Kalban, CEO of DH, said: “Dubal Holding has kept its focus firmly on a diverse growth strategy, and this joint venture with Dubai Investments and Mars for Emiroll aims at creating new demand for aluminium in the rapidly growing downstream industries across the region. Dubal Holding’s stake in Emiroll is a significant milestone in its growth plans, as it seeks to strengthen its presence in the aluminium sector globally.”
Khalid Bin Kalban, managing director and CEO of DI, said: “Dubai Investments’ foray into the aluminium rolling is part of its strategy to support the development of the non-hydrocarbon sector in the UAE and boost the manufacturing sector’s contribution to the country’s GDP. Emirates Aluminium Rolling aims to capitalise on the unmatched market demand in downstream industries across the Middle East and is expected to play a major role in this direction. Dubai Investments already has a strong portfolio in the manufacturing sector, and the launch of Emiroll will further diversify its product base – particularly in construction materials and related industries.”
The entry of Emiroll in Kizad marks an intensification of Abu Dhabi’s drive to veer the emirate’s economy increasingly away from the oil and gas sector. The emirate has made notable progress in this regard, having modernised its port facilities and created major industrial assets including Emirates Global Aluminum-Al Taweelah, which is the flagship tenant of Kizad.
Emiroll will join other aluminium-related ventures in the enclave including Taweelah Aluminium Extrusion Company and Senaat-Ducab’s aluminium rod plant which is set for operations next year.
Kizad has around 90 national and international investors, and some 13 million sq m of land leased, representing investment of nearly $15 billion. It is integrated with Khalifa Port, which handled 1.5 million containers in 2015, a 32 per cent growth over the previous year, making it the fastest growing port in the Middle East. Tenants of the hub are engaged in the industries of aluminium, engineered metal products, food processing, packaging, trade and logistics as well as general light industries such as pharmaceuticals and polymers.
“Kizad plays a major role in Abu Dhabi’s emerging position as a global business hub, enabling the emirate’s Economic Vision. Integration with Khalifa Port has already made Kizad an attractive foreign direct investment destination,” said Capt Mohamed Juma Al Shamisi, chief executive of Abu Dhabi Ports, Kizad’s operator.
Kizad signed up 21 lease agreements in 2015 with national and international investors and three plot-extension pacts with existing investors. Memoranda of understanding (MoUs) were signed with Industrial Development Bureau (IDB) of Abu Dhabi’s Department of Economic Development (DED), and Sace Group – the Italian Export Credit Agency – to further draw investments into the integrated trade and industrial hub of Abu Dhabi.
Among companies that recently broke ground for their ventures is National Food Products Company (NFPC) which is building a plant to manufacture most of its brands. NFPC has some well-known brands including Oasis, Blu, Milco, Lacnor and Gulf & Safa.
The factory will be constructed at Kizad’s food cluster where many global and regional food industry clients have already set up their enterprises.
“By hosting NFPC as our anchor tenant, Kizad’s food cluster will significantly contribute towards the efforts to meet the growing food demand in the GCC, especially in the UAE,” said Al Shamisi.
“NFPC’s ambitious expansion plans are timely as the food consumption in the GCC is expected to grow at a 3.5 per cent compound annual growth rate (CAGR) between 2014 and 2019 to reach 51.9 million tonnes.”
NFPC president and CEO Fady Antonios observed that the new facility marked a “new paradigm of growth” for the company’s brands in the F&B sector.
Another recent investor from quite another industry is the Sobha Group which is launching Safnon Italia, a furniture factory-cum-showroom in Kizad. Sobha Group is one of the largest real estate developers in India and the Middle East and boasts over four decades of experience in the interior decoration and wood working sectors.
At 172,990 sq m, the facility will be one of the largest of its kind in the GCC region. Production will include upholstered furniture, modular furniture, kitchen, wardrobe and wood joinery – all of which will cater to the region’s business-to-business (B2B) market.
“Sobha Group is a new entrant among the prominent global and regional business players that have chosen Kizad to set up their businesses. The group’s decision to establish Safnon Italia in Kizad proves that the integrated offerings of Khalifa Port and Kizad provide an ideal infrastructure for innovative business ventures,” said Mana Mohammed Saeed Al Mulla, CEO of Kizad.
Kizad has already chalked up an enviable record of investments, but is scouting for more. In one of its latest initiatives, a team visited Pakistan on a marketing mission.
“Abu Dhabi Ports always takes initiatives to work with businessmen as we both share the common goal of economic development of the UAE and the world at large,” said Al Mulla.
“The synergy of partnerships and collaborations always brings out wonderful results, and we look forward to the same from our engagement with the Pakistan Business Professional Council.”