RWI to boost distribution after rubber price spike

Abu Baker Shaikhani is aiming for an 'aggresive expansion initiative'

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Rubber World Industries, maker of building insulation ‘Gulf-O-Flex’, is to aggressively increase its production and distribution network in the GCC to capitalise on the surge in demand for rubber and chemical materials, according to the company chairman.

“The worldwide surge in the prices of raw materials we use for the production of ‘Gulf-O-Flex’ has driven us further into undertaking an aggressive expansion initiative, which will not only address the heightening demand for rubber insulation products but also allow us to maintain our prices for the benefit of our customers,” said Abu Baker Shaikhani.

“We are also motivated to identify more ways to increase our efficiency as we expand our manufacturing facility.”

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Chemical materials and rubber has increased by up to 40% in the last six months as wider fluctuations in the price of building supplies continues to dog projects in the Gulf states. The two sets of materials have now reached between USD 1,600 and USD 2,800 per metric tonne, according to analysis by RWI.

An increased demand for rubber by 4% next year, and the closure of factories in the region and around the world, is severely squeezing supply.

RWI told Construction Week in an interview last December that it was to increase its output by a quarter this year to capture the demand increase. It aims to offer its products at current prices based on the company’s economy of scale.

“We have monitored a significant drop in imports from Italy and China, an indication of the market turning into local sources for rubber insulation products,” said managing director Muzammil Shaikhani in an interview.

The 14-year-old company is also working on growing its distribution network, having recently signed a deal appointing UAE-based HVAC company Leminar Air Conditioning Industries as the exclusive distributor of 'Gulf-O-Flex' rubber insulation for HVAC applications in the UAE.

RWI – part of the Shaikhani Group of Companies, a multi-billion dollar conglomerate that in February this year launched the UAE-based Shaikhani Developments - is also bidding to be the rubber insulation supplier for many projects in the country following its involvement in the construction of the Al Raha Beach development, Saadiyat Island project and ‘Yas Island’ in Abu Dhabi.

India, Thailand, and Vietnam are three of the biggest producers of the commodity, which has been one of the most volatile materials over the last few months on international markets following fluctuating demand and the effect of the eurozone debt crisis.

Today in Japan rubber futures lifted 1.2% following the first decline in the delivery of the material for four days.