Dewa produces 207 million units a year under its Mai Dubai brand. Sarah Dea / The National
Dewa produces 207 million units a year under its Mai Dubai brand. Sarah Dea / The National

Dewa to expand water bottling capacity at Mai Dubai plant with exports planned



Dubai Electricity and Water Authority (Dewa) will expand the capacity of its water bottling plant in the second half of the year as it looks to start exporting next year.

The utility produces 207 million units a year under its Mai Dubai brand. It expects to ramp that up to 258 million units in August.

The bottles are sold in convenience stores and delivered to residences and offices.

Mai is the Arabic word for water. The brand’s name is also a play on #MyDubai, a hashtag that Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, announced last year as a social media platform.

The brand uses desalinated water that is piped in from the Dewa reservoir.

Mai Dubai’s bottling plant is located off Al Qudra Road and started production last March. Expansion plans include onsite accommodation for about 500 people. At the sprawling 22,123 square metre factory, water is filtered for sand and carbon, then remineralised and treated with ultra-violet rays so that it remains fresh.

“The project is one of the main pillars of Dewa’s plans to diversify revenue streams by investing in new ventures,” said Saeed Al Tayer, the Dewa managing director and chief executive.

He declined to give a cost for the project.

Competition in the bottled water category is growing. Abu Dhabi-based Agthia plans to double its water bottling capacity in Turkey in May, and is introducing a new bottling line for its Al Ain brand of water in the second half of next year. Its Turkish brand is marketed under Alpin Natural Spring Water.

Projects such as Dewa’s water bottling plant are part of the growth of manufacturing in Dubai.

The manufacturing sector contributed 13.4 per cent of total GDP in the first nine months of 2013, according to an Emirates NBD report last May. It also accounts for about 15 per cent of Dubai’s workforce.

Non-oil exports and re-exports by Dubai Chamber and Commerce members touched Dh290 billion last year – the highest level in five years – up from Dh285bn in the previous year. It has 169,198 companies registered under it, up 10.6 per cent on a year earlier.

The emirate’s diverse economy is expected to stand it in good stead even as oil prices affect construction, infrastructure, manufacturing and drilling, according to Trevor Murphy, the managing director at the recruitment company Morgan McKinley UAE.

It has noted an uptick of recruitments in the professional hiring market across the Emirates. It said hires rose 2 per cent to 8,162 jobs in the fourth quarter of last year from 8,002 jobs in the previous quarter.

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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.”

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