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A JV between Empower and Logstor of Germany promises to cut supply-chain costs and boost the cost-effectiveness of district cooling, which is facing a difficult time as large-scale developments are being scaled back.
The US$25 million facility in Jebel Ali will cater to the requirements of the district cooling and oil and gas sectors across the Middle East. Known as ELIPS (Empower-Logstor Insulated Pipes Systems), the facility represents Dubai’s success in bringing fresh investments into the Emirate. Further, it demonstrates Dubai companies’ progressive outlook in investing in new ventures, expanding existing facilities to provide full integrated solutions, and producing raw material internally instead of importing it, said Empower CEO Ahmad Bin Shafar.
“Empower decided to enter into this JV with an eye on securing the supply chain of pre-insulated pipes used in district cooling networks, which constitutes 20% to 25% of total capital outlay. The facility will ensure timely delivery and installation of pipe networks that will have a major impact on Empower’s project timelines,” said Bin Shafar.
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ELIPS will ensure high quality of insulation and casing of pipes, enhancing efficiency and maintenance costs of district cooling services. It will boost the supply chain by eliminating artificial price fluctuations created by various players due to the demand-supply gap, added Bin Shafar.
Preben Tolstrup, CEO of Logstor, which owns a 49% stake in ELIPS, said: “We are the world’s leading pre-insulated pipe manufacturer, with more than 50 years’ experience and ten factories worldwide, serving customers in more than 50 countries. With the prime purpose of supplying top-quality district cooling pipe systems to the entire region, the world’s most advanced technology to be introduced at this new plant will set the standards for many years ahead.”
“This factory represents an opportunity for Empower to achieve backwards integration. It will also consolidate our status as a leading regional player in pipeline systems by meet the industry’s primary requirement for pre-insulated pipes.
Empower’s position as the region’s number one company for district cooling is more realised now with the opening of this factory,” said Bin Shafar.
Logstor has been serving the Gulf since 1992, and is now marking its commitment to serve the region by establishing an anchored presence with ELIPS. Depending on dimensions and output from 100 to 300 pipe joints a day, the factory will offer job opportunities for a wide range of competences, from operators to highly-skilled engineers.
ELIPS will use spray technology for manufacturing large-diameter pre-insulated pipes, which will ensure high-quality products and also result in savings in raw material costs as compared to traditional injection technology. This technology also enables the JV to enter the oil and gas industry, which is not possible with traditional injections. Currently, only one out of five existing pre-insulated pipe manufacturers are using spray technology.
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