AkzoNobel, a global paints and coverings producer, opened a US$10 million facility in Dubai’s Al Quoz yesterday.
The plant, employing 40 people, will be its sixth in the Middle East producing powder coatings used for the protection of buildings and pipelines in the oil and gas industry. Amsterdam-based AkzoNobel provided the powder coating for Sheikh Zayed Bridge, Burj Khalifa and all of Dubai’s gold roofed metro stations. It considers the Middle East as key to its growth strategy.
“We have nearly 1,000 people working across the Middle East,” said Conrad Keijzer, AkzoNobel’s executive committee member responsible for performance coatings.
“The coatings industry is growing at 6 to 7 per cent a year and we expect to double that. The Middle East and the UAE in particular has been the most resilient since the global crash with a continuously strong construction sector and its oil and gas facilities are strong.”
Powder coatings are used to protect and strengthen oil and gas pipelines, a market that could weaken because of the slump in oil prices.
“When AkzoNobel decided to build this plant they could not have foreseen today’s oil price,” said Joost van Beek, a securities analyst at the private bank Theodoor Gilissen. “However, most of its plants are for the long term and its contracts will be for two or three years hence so it will not be an immediate concern. AkzoNobel has been like a lot of European companies and trying to lessen its exposure to Europe and there is no economic growth.”
Regardless, Mr van Beek said the Middle East remains a good place for AkzoNobel to be.
“The Middle East is a huge market for paint in the construction industry and it makes sense for AkzoNobel to be at the heart of it so it can provide powder coatings immediately,” he said.
Likewise Mr Keijzer said: “We are very bullish on the country and the region. We will be producing 7,000 tonnes [a year] at first but that can ramp up to 14,000 tonnes.” The new plant in Dubai will allow companies that provide services to the construction industry a shorter time line, driving bottom lines sales.
“Everything for me is financial, when I can get better products on my doorstep and an ability to deliver it to a customer quicker then my business moves faster,” said Khaled Abdel Moneim, the chief executive of Alupco, Saudi Arabia’s biggest aluminium producer with 20 per cent of its business in the UAE.
“When I need paint I need it today, not tomorrow. AkzoNobel has new products that means I can sell at a higher price and that gives us an edge because they have not been available here before today.”
ascott@thenational.ae
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