A Dh6 billion (US$1.6bn) expansion plan is expected to drive Abu Dhabi's manufacturing ambitions as General Holding Corporation (GHC), the industrial investment arm of the emirate's Government, announces Dh1.5bn of profit.
Its largest investment involves the Dh3bn expansion of Emirates Steel, GHC's steel production subsidiary, the building contracts for which are to be awarded in the second half of the year. GHC also plans to build a Dh2bn plant to manufacture seamless pipes for the oil and gas industry, as well as an Dh800 million aluminium extrusion plant.
Hussain Al Nowais, the chairman of GHC, said the investments fitted into the company's overall goal to expand Abu Dhabi's industrial presence.
"The Abu Dhabi 2030 economic vision targets 25 per cent of Abu Dhabi GDP from the industrial sector. Today we are below 15 per cent. We are one of many different players targeted with increasing this to 25 per cent," he said.
The activities of GHC, which was set up in 2004, include spring water bottling and steel making. It has interests in nine companies, including Ducab, a cable manufacturing firm owned jointly by the Governments of Abu Dhabi and Dubai, and Agthia, a food and beverage group.
Mr Al Nowais was speaking after the firm announced a net profit of Dh1.5bn for last year, a 15 per cent rise from Dh1.3bn the year before. Emirates Steel and National Petroleum Construction Company (NPCC), its two flagship firms, accounted for the bulk of the profit. Revenue rose 16 per cent to Dh11.5bn over the same period on the year before. Assets rose to Dh23.7bn compared with Dh21.6bn the year before.
"We are proud we have achieved such results in a difficult and turbulent time. With the picture looking brighter for the country and the region, we are sure we will grow with it," he said.
Last year, GHC invested Dh2.7bn in various industries and borrowed Dh660m from banks.
Further investments are planned for this year. The projects fit into GHC's remit to build clusters of industries to support the development of upstream and downstream manufacturing in the capital. Contracts will be awarded in the third or fourth quarter for the construction of the Dh3bn phase three of Emirates Steel's facility in Abu Dhabi Industrial City. Phase two, completed in December, involved raising rolling output capacity to 3 million tonnes. Once complete, phase three will add 2 million tonnes per year, said Mr Al Nowais.
Between 60 and 70 per cent of phase three will be funded through project finance debt, including a mixture of export credit agency and loans or bonds, said Mukhtar Safi, the chief financial officer of GHC.
GHC has already invested about Dh10bn in Emirates Steel and hopes the latest expansion effort will enable the emirate to rival Saudi Arabia as a top steel producer in the region.
Through its subsidiary Abu Dhabi Basic Industries, GHC is a partner in a project to build an aluminium extrusion plant close to the Emirates Aluminium facility in Khalifa Industrial Zone . The plant will process aluminium from Emirates Aluminium and sell the finished products to the open market.
GHC is also exploring new industries. Mr Nowais said the firm would soon announce a 50/50 joint venture with another company to make seamless pipes, which are used in the oil and gas industry.
Another part of GHC's responsibility is to employ more nationals in manufacturing. The steel expansion and aluminium project are expected to create about 500 jobs each.
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