OBG talks to Suhail Al Ameri, CEO, General Holding Corporation (SENAAT)

 Suhail Al Ameri, CEO, General Holding Corporation (SENAAT)

Interview: Suhail Al Ameri

What developments are under way in value-added manufacturing and metals production?

SUHAIL AL AMERI: SENAAT is a key contributor to the industrial diversification of Abu Dhabi’s economy through various investments. Emirates Steel (ES), for example, is the largest integrated steel manufacturer in the UAE; the commissioning of Phase II (A) takes the project’s total capacity to more than 2m tonnes and the overall investment to date is approximately Dh10bn ($2.7bn). Another of our portfolio companies, Ducab, the technologically advanced cable manufacturer, has inaugurated and commissioned a Dh500m ($136.1m) high/extra-high-voltage plant that will further serve local and international utilities markets. There are many examples where downstream manufacturing has developed as a result of investments in heavy industry. Downstream projects are positively received, especially if feedstock is provided by local firms. The government incentivises downstream investments through financing provided by a number of institutions, and initiatives like the Khalifa Fund. The initial projects for new heavy industries are generally outside of the reach of the private sector, but once the investment is made, downstream and supporting services will also benefit. The availability of competitively priced energy is our comparative advantage. Industries that rely on power continue to invest in Abu Dhabi to capitalise on this strength.

What needs to be done in terms of infrastructure development to enhance local investment?

AL AMERI: SENAAT’s total industrial investments in 2011 were at Dh2.7bn ($735m), compared to Dh2.5bn ($680.5m) in 2010, which highlights the positive local investment environment at the moment. We are self-funding and reinvest our profits into industrial projects. The government is also making significant investments in the emirate’s industrial infrastructure. Projects such as Etihad Rail will help address transportation needs in the market, and encourage and support export-oriented industries throughout the emirate. Transport and road projects will help facilitate the transfer of both raw materials and finished products in and out of the various industrial zones. When this infrastructure is in place, it will encourage us and private sector players to continue industrial investment. This is yet another example of how the government is incentivising development in manufacturing and heavy industries.

Which industrial segments do you anticipate will see the greatest growth and demand for employees?

AL AMERI: The development of human capital is of critical importance; we employ more than 18,000 people, reaching Emiratisation levels of 25% in 2011, compared to 21% in 2010. Abu Dhabi targets industries that are more innovative and depend on automation, capital and energy, rather than those that are labour intensive. This utilises the competitive advantage of our economy. That said, heavy industries do create job opportunities. Additionally, due to the size of the investments, industrial companies can accommodate UAE nationals in a range of activities, from technicians to managerial positions. Industrial jobs pose unique challenges, because of the nature of the work and the need for shift hours. However, we find that nationals are still attracted to these jobs, and as downstream industries develop, more employees will be needed by the sector.

How would you characterise the financing environment for industrial projects?

AL AMERI: It is important to emphasise the role of financial institutions in industrial development. Commercial banks have concerns about real estate projects, as a result of the financial crisis. There is a slowdown in real estate financing, but banks still seek projects to fund. Many have decided to place their focus for future growth on manufacturing and industry. Banks use their own due diligence to evaluate projects’ viability and we use commercial banks to assess the opportunities we pursue. They are an important part of the investment environment and encourage downstream projects.

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The Report: Abu Dhabi 2013

Industry chapter from The Report: Abu Dhabi 2013

Cover of The Report: Abu Dhabi 2013

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