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UAE cable maker Ducab expects more growth opportunities in India following the signing of the Comprehensive Economic Partnership Agreement (CEPA) between the Emirates and Asia’s third-largest economy earlier this year and the strengthening of ties between the two countries.
The company plans to supply cable and other metal products to the transport sector as well as mega infrastructure projects that are being built in India, chief executive Mohammed Al Mutawa told The National.
“We have been limited with the revenue from the Indian subcontinent because of some previous trade barriers," he said.
"Right now, with the agreement that we had, these barriers have been reduced considerably and the opportunity for business has improved dramatically.”
The UAE and India signed the CEPA pact in February, with the pact expected to boost non-oil trade between the two countries to $100 billion in five years from $60bn currently, opening additional avenues of investment.
As part of the agreement, 80 per cent of tariffs on Indian and UAE goods have been removed, with plans to lift all tariffs within 10 years to boost trade between the countries, said Dr Thani Al Zeyoudi, the UAE's Minister of State for Foreign Trade.
The deal is also expected to add 1.7 per cent, or $8.9bn, to the UAE's gross domestic product and boost exports by 1.5 per cent, or $7.6bn, by 2030.
“Our first shipment to the Indian market happened in 1988, we supplied almost 100 kilometres of low voltage cable to the Nhava Sheva project [in Mumbai]. From these humble starts, Ducab has access to 100 partners that we deal with in India … right now we have multiple projects that we are working on," Mr Al Mutawa said.
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India, the world’s second most populous country, is spending billions of dollars on new road and rail projects across the country to boost growth. The country’s economy is expected to grow 7.4 per cent this year, the International Monetary Fund has said.
Ducab, which is jointly owned by Abu Dhabi holding company ADQ and the Investment Corporation of Dubai, recorded Dh5.5bn ($1.49bn) in revenue last year and aims to exceed that figure by about 10 per cent this year amid new opportunities to sell its products in different markets.
“There are new opportunities within the existing markets but we are more focused on opportunities in new markets that would expand our reach,” Mr Al Mutawa said.
Ducab is looking to boost its presence in Africa and Europe amid higher demand for its cable and metal products, he said.
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The company currently exports 60 per cent of its products to different markets, with the UAE accounting for 40 per cent of its sales.
The UK, China, Australia, Egypt and Iraq are its biggest export markets and the company plans to grow in markets including the US and India, Mr Al Mutawa said.
Ducab is also looking for opportunities to boost exports to Saudi Arabia, the Arab world’s largest economy.
“We do have a big market in the UAE that requires our biggest attention, but we are expanding in Saudi Arabia, we have grown our sales over the past few years quite considerably ... going forward Saudi Arabia is going to be an important part of our strategy," he said.
Saudi Arabia is investing heavily in several mega developments, such as the $500bn Neom project. It is also planning to build more internal railway networks to jump-start its investment in the infrastructure sector.
For Ducab, another area of focus is the renewable energy sector. The company plans to supply cables to new projects within the sector amid the increased global attention on boosting clean energy capacity to cut emissions.
“We have been the supplier of choice for all the mega solar projects within the UAE," Mr Al Mutawa said.
That includes the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, the largest single-site solar park in the world. It aims to have a total capacity of 5,000 megawatts by 2030.
Ducab has also supplied Al Dhafra project in Abu Dhabi, which will be the world's largest solar plant when completed with a capacity of two gigawatts.
"The Sudair [solar plant] in Saudi Arabia is another big project [for us]," he said.
The company also supplied cables to wind farms in Australia and Europe, and is looking at expanding its reach to a “wider range in the renewable power segment”, he said.
The expected global economic slowdown amid higher inflation and the Ukraine war may “put pressure” on Ducab, but will not affect its business and growth plans, Mr Al Mutawa said.
“Over the past 43 years, since the company’s inception, Ducab has only proven resilience to any change in the market and is forward-looking both tactically and strategically to position the UAE and the 'Made in UAE' product in global markets," he said.
The company has no plans to raise money through bonds or sukuk issuance, but “with an ambitious growth and expansion plan, everything is in the mix”, he said.