Dubai Cable Company, or Ducab, is set to open its $60 million aluminium plant next year and its top official said this is an opportunity because demand for aluminium is growing as it is a cheaper alternatives to copper for power transmission.
According to industry estimates, aluminium is around 30 per cent cheaper compared to copper. That's the reason the yellow metal is losing its charm.
"There is a growing demand for the aluminium market... For this reason Ducab has decided to expand its portfolio and cater to that growing market. This is an opportunity we decided to tap into," Ducab managing director Andrew Shaw told Khaleej Times.
Currently the plant is under construction as per plan in Kizad in Abu Dhabi, and it is on track to open in the first half of 2016, he added. "Dubai Aluminium Company will include a 50,000tpa aluminum rod mill production capacity, of which 18,000tpa will be converted on-site into finished overhead conductors," he added.
Jointly-owned by the Investment Corporation of Dubai and General Holding Corporation, which is part of the Abu Dhabi government, Ducab operates five manufacturing facilities in the UAE, which includes Ducab Jebel Ali, Ducab Mussafah 1 Factory, Ducab Mussafah 2 Factory, Copper Rod Factory, and Ducab High Voltage Cable Systems Factory.
Talking about the company's sales this year, he mentioned that the group's sales volume has increased from the previous year. "The order intake [for Ducab] was 30 per cent higher in the first half of the year compared to same period last year," he said.
The UAE consumes around 40 per cent of the total products manufactured by the Ducab Group and the remaining 60 per cent of the products go to export markets.
"As we diversified our products portfolio the exports have consistently increased over the last few years," he said.
Responding a question about the current real estate market situation, he replied: "Even if the construction sector slows down, the Middle East region is expected to invest in developing core infrastructure and we have products that cater to other sectors, such as oil and gas; this market continues to be steady and robust for us, despite oil prices being where they are."
"Ducab is also investing in new products to be offered to new sectors that are still developing like renewables, etc, and at the same time will continue with its plan to diversify into new export territories for seeking additional growth outside of UAE," he explained. There is a demand for cables in the GCC market, driven by continuous growth - Dubai's growth is driven by Expo 2020, Qatar's by the 2022 Fifa World Cup projects and Saudi Arabia is developing in order to satisfy the needs of its growing population.
Talking about the challenges to the industry, he said: "One of the challenges is to ensure that we maintain our high standards and assist parties associated with us to maintain the same standards as well."