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Cable-maker Ducab reflects on the health of the infrastructure sector, and the construction industry in general. MEP Middle East speaks to MD Andrew Shaw and chairman Ahmad Bin Hassan Al Shaikh.
Why did you decide to exhibit at Hannover Messe for the first time this year?
Shaw: Our objective was to get onto an international platform. Really it was not about selling into Europe, as Hannover Messe is a global procurement fair.
What we wanted was to get our brand out there and make contact with essential customers from the rest of the world, because everyone goes to Hanover Messe. It provided a good opportunity to obtain a much broader presence.
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And we picked up quite a few contacts that we are in the process of converting to sales. So it gave us excellent exposure. If you look at some of our international customers we already do business with, they were also quite pleased at seeing us projecting ourselves onto such a platform.
Al Shaikh: How does this tie in with our local strategy? To be strong locally you have to be well-known at an international level, and that is basically what we have achieved.
By exhibiting our products in a wider context, we have also engendered greater respect in the local industry and in the region. We are assuring our local investors and partners that this is a strong company with a long history and continued growth, even in the present time, given the decline in the whole region.
Our growth is going as planned. None of our announced projects have been cancelled. We are forging ahead with our announced Qatar manufacturing facility, and are establishing our representative office in Saudi Arabia, together with all the pre-planned expansion of our facilities here, and the announcement in March of the AED500 million Ducab HV joint venture. Hence exhibiting at Hannover Messe 2009 only served to underscore our strength and strategy.
Can you tell us about your latest financial results, and if you foresee your growth trend holding constant?
Al Shaikh: Our second-quarter results revealed a 30% improvement over the first three months, while June sales exceeded budget. This improvement is extremely positive. We have not yet audited Q3, but the sales output promises to be as good.
Our expectation is that we will be somewhere near last year’s output, which I believe in terms of comparison, due to the fluctuation of the copper price, should not be compared as revenue, but rather as capacity or tonnages.
Shaw: In terms of sectors contributing to the growth, everyone has talked about the impact of Qatar, Saudi Arabia and Abu Dhabi – let us say, the more buoyant economies.
What has surprised us this year is that frankly we expected a big reduction in Dubai because of the fears in the real estate market. Certainly our first-quarter results were slow. But what has been good, however, is that Dubai projects did restart round about February and March.
That helped us with the increase in the second half. Still, you have to be cautious. To be honest, if you look at next year, we need to look to the region for growth, because it is not really expected that many new projects will start in Dubai, which has reached a plateau.
And, of course, new projects take a while to come through in terms of cable demand.
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