21/04/2012 15:01 AST
General Holding Corp. PJSC, the Abu Dhabi government-owned holding company, plans to invest 5.8 billion dirhams ($1.6 billion) in the next three to four years as it helps expand the sheikhdom’s industrial sector.
The company plans to spend 3 billion dirhams expanding Emirates Steel Industries PJSC, which operates the largest steel plant in the United Arab Emirates, Hussain al Nowais, the company’s chairman, told reporters in Abu Dhabi. It also plans to invest 800 million dirhams in a plant that will process aluminum produced by Emirates Aluminium Co., an Abu Dhabi-based smelter, and 2 billion dirhams with an unidentified joint- venture partner to produce so-called seamless pipes used by the oil and gas industry, al-Nowais said.
“At the moment, the industrial sector represents less than 15 percent of Abu Dhabi’s economy,” said al-Nowais. “General Holding wants to help Abu Dhabi reach its goal of 25 percent.”
Abu Dhabi, home to more than 7 percent of the world’s proven crude oil reserves, is seeking to diversify its economy to reduce reliance on income from exporting crude. The city is expanding its production of steel, aluminum and petrochemicals, which can then be used to spawn new industries.
General Holding net income advanced 15 percent to a record 1.5 billion dirhams for full-year 2011 from 1.3 billion dirhams a year earlier, it said in a statement. Revenue from the conglomerate, whose companies range from energy services to food, rose 16 percent to 11.5 billion dirhams.
Steel Contract
Emirates Steel plans to award a contract this year to build the phase 3 expansion of its Mussafah steel plant in Abu Dhabi, which will take production to 5 million tons a year, al-Nowais said. The company plans to borrow about $600 million, or 60 percent to 70 percent of the total cost, to finance the expansion, he said. The company hired BNP Paribas SA (BNP) in January as its adviser.
Another General Holding unit Abu Dhabi Basic Industries Corp., a developer of polymers, petrochemicals and metals projects, is studying four new projects that it may invest in, including two related to aluminum and one for copper, al-Nowais said. General Holding is also considering an acquisition in the steel business, he said.
Arkan Building Materials Co. (ARKAN), a construction-supplies maker 51 percent-owned by General Holding, may get more contracts in Abu Dhabi this year as the sheikhdom expands infrastructure such as housing, schools and hospitals, al-Nowais said.
Most of General Holding’s income comes from Emirate Steel and National Petroleum Construction Co., an oil-services company of which it owns 70 percent, he said. Total assets rose 10 percent to 23.7 billion in 2011.
Bloomberg
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