Abu Dhabi Basic Industries Corporation plans to announce a major aluminium project after its bid to establish a large-scale plastics manufacturing cluster in Musaffah faltered.
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The company expects to disclose details of the joint venture in the next two weeks.
Three years ago the government-backed company set out to develop an industrial park intended to become a major cluster of plastic-converting companies. But only one tenant, a maker of artificial grass, has been signed.
"Because of the economic crisis, the attraction of those companies does need more work," said Jamal al Dhaheri, the chief executive of Adbic. "At the moment we're revisiting the whole plan and looking at exactly what's been achieved, what needs to be achieved, what is the progress … Hopefully we'll have a better understanding shortly."
The planners of Polymers Park in the industrial hub of Musaffah had envisioned a sprawling complex that would draw US$4.4 billion (Dh16.16bn) of investment from the companies that mould raw plastic pellets into products including car fenders and television parts.
The one tenant Adbic has signed will eventually make 15,000 tonnes of artificial grass yarn a year - representing just a fraction of the 1 million tonnes of plastics production that Adbic had hoped to achieve by next year.
Polymers Park, launched in June 2008, was to be a cornerstone of the emirate's plan to diversify away from an oil-driven economy.
Rather than exporting raw hydrocarbons or the petrochemicals made with them, Abu Dhabi hoped to turn such chemicals into plastic parts.
But the emirate has not yet developed a large-scale manufacturing industry, unlike China, where plastics converters have clustered in recent years.
"The whole feasibility of our project is very complex," said Mr al Dhaheri on the sidelines of a conference yesterday. "It's not that simple, especially that you are away from the market … Because of what's happening with the economics, sometimes it does defer the investment for some time."
In 2009, Adbic said it could invest up to $100 million to attract tenants through joint-venture agreements. The artificial-grass facility is the result of a $20m venture between Adbic, which backs a quarter of the investment, and Low & Bonar, a UK materials manufacturer.
"They are really expanding their capacity, and we're having a number of talks with other companies that have an interest," said Mr al Dhaheri.
ayee@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
