Emaar to diversify from traditional focus

Emaar Industries & Investments proposed deals to encompass new ventures will involve an investment of Dh825.25m.

New horizons: EII plans to invest heavily in projects in Manama.

DUBAI // Emaar Industries & Investments (EII) is planning to make wide-ranging investments in an effort to diversify its traditional focus on construction and manufacturing companies to include the management of industrial parks, downstream oil and gas assets, and pharmaceutical ventures. EII, an investment-focused subsidiary of Emaar Properties, the Dubai property giant, is working on four deals - in the UAE, Bahrain, Algeria and Jordan - with a total investment potential of Dh825.25 million (US$225m), according to Mohammed Saeed al Raqbani, the company's deputy chief executive. EII is negotiating with several international firms to set up manufacturing and export facilities in the UAE, and is teaming up with Abu Dhabi's private investors to develop a chemical production plant in the capital valued at $180m. EII would have a 50 per cent stake in the plant. "The plant is now beyond the feasibility stage and is the first of its kind in the region," Mr Raqbani said.

The company also hopes to close a $500m deal to develop a multi-use industrial park in Bahrain. EII would retain a 10 per stake in the venture and manage and operate the industrial park as well. The rest of the equity would be pumped in by several financial institutions and EII's strategic partners. In addition, the company is looking at a home appliances manufacturing facility in Jordan and a pharmaceutical plant in Algeria. According to Mr Raqbani, the takeover deal in Jordan has an investment potential of $50m, while the pharmaceutical manufacturing facility has an estimated investment value of $35m. He said EII hoped to close two or more of the deals - worth at least Dh367m - before the end of the year. EII is also looking beyond the Middle East, including the possibility of entering the energy sectors in India and Pakistan. "We have been concentrating a lot on markets outside the UAE... [including] in Saudi Arabia, Algeria, Morocco, Jordan, Bahrain, Pakistan and India," he said. "There are several options on the table to set up power plants in South Asia. We intend to partner with local specialists in the power generation business but no final decision [has yet been] made.

"We have received interests from Bahrain, Morocco and Egypt to join as partners in the logistics sector," he added. EII has a total asset value of Dh1.4 billion, and plans to increase its investment portfolio to Dh5bn within the next three years. Mr Raqbani said EII's investment budget for this year was Dh400m, but that figure was flexible. "So far we have plans to spend another Dh400m in 2009 on new acquisitions, but the final budget will be decided next month." The firm has reduced its controlling stake to 36 per cent in Dubai-based Multiforms, and is planning to exit two of its other assets by the end of next year, according to Mr Raqbani. EII is cash rich and its exit strategy will help the firm raise capital, he said. "We have plans to hold investments for a period between three and five years." Established in August 2005, EII holds stakes in small and medium-sized firms, predominantly in the UAE. It has invested in 14 firms including majority stakes in Mammut Building Systems, Caparol, Dynergy Technologies, Emirates Jewellery Manufacturing - a joint venture with the Jewellery retailer Damas - Starwood Industries and Advanced Industries Group. Emaar Properties owns 40 per cent of EII, while Dubai-based Zabeel Investments holds a 12 per cent stake; various individuals hold the remaining ownership stakes. [e-mail]