Interview: Jamal Salem Al Dhaheri
How does Senaat ensure the stability of industrial businesses amid volatile market conditions?
JAMAL SALEM AL DHAHERI: Senaat has a diversified portfolio which allows for the mitigation of challenges in any given industry. While the metals segment is experiencing significant pressure from market competition and feedstock prices, Senaat can balance these headwinds with its participation in other fast-growing industries. This in turn enhances our overall resilience and profitability.
Meanwhile, we aim to take an active role in managing our portfolio, as we believe that it is critical to identify and support synergistic opportunities among Senaat portfolio companies. For instance, our new aluminium extrusion and rod mill companies, namely Talex and Ducab Aluminium Company, respectively, have been built close to Emirates Global Aluminium’s Al Taweelah smelter to benefit from the raw material. Further integration will help improve efficiency across manufacturing activities. Resilience, however, will depend not only on operational efficiencies and integration, but also on expanding a company’s footprint globally. Whenever the local market is down, there may be good opportunities in foreign markets. For example, Emirates Steel and Ducab supply nuclear-grade steel and cables locally, as well as to South Korea and other international markets.
Given rising energy costs, how is industry likely to evolve over the coming years?
AL DHAHERI: Abu Dhabi has built on its rich resource base industrial and infrastructure assets that will allow for the industry and economy to flourish. After establishing these building blocks, we are now looking at more sustainable projects that will expand on these industries further downstream. As utility prices have risen, companies are being encouraged to steer away from high-energy intensive activities and build on existing investments to generate value-added products. These trends are part of a global shift towards sustainability, with companies across the world tapping into renewable resources and engaging in a holistic approach to reduce their environmental footprint and carbon emissions. These efforts will also give businesses a competitive advantage amid rising energy prices.
In what ways are the government and the private sector promoting local content?
AL DHAHERI: Abu Dhabi has rolled out several new policies and initiatives to enable the industrial sector and ensure diversification away from oil and gas. The government has stepped up its efforts to address dumping as a way to support local businesses. Meanwhile, the Abu Dhabi National Oil Company launched a local content package that aims to evaluate local content as part of a project criteria. This approach can then be replicated by the government, namely by supporting companies that invest locally. Local companies are actively seeking to build upon their capabilities in order to satisfy the growing demand for local content in the UAE. Traditionally, major enterprises in the UAE relied on expertise available in the global market, but now local organisations, including Senaat, are seeking to develop in-country capabilities through partners and joint ventures in order to satisfy the requirements of an increasingly sophisticated economy.
To what extent is financial support available for industry, and what can be done to improve it?
AL DHAHERI: There is still a shortage of long-term industrial funding in the UAE, as most of the available funding remains limited and costly. Industrial development would benefit from an established industrial finance system or fund that supports companies at a lower margin vis-à-vis the traditional banking system. Although several government programmes exist to support small and medium-sized enterprises, industrial projects worth Dh500m ($136.1m) and above would not be eligible, leaving a large gap in the industrial funding space with commercial lending as their only support.
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