Face to face: Berk Pasinler, Emirates Buildings
Shareholders have recouped the money they have put in over past 10 yrs
Berk Pasinler, the general manager of Abu Dhabi-based Emirates Buildings and its sister company Dome General Contracting, has a lot of confidence in his firm’s product – a 3D system of building panels used in low-cost housing that can be cut to defined shapes on site.
The system is made from a polystyrene insulation core bound by either stainless steel or galvanised iron wires. These can then be either coated in precast concrete or sprayed with concrete pumps on site, offering a range of advantages over traditional block works.
Indeed, his belief in its potential knows no bounds, with demand for low-cost housing rocketing across the region. His firm, whose product has already been used to build over 2,000 villas in Abu Dhabi and Al Ain, is not only looking to grow its footprint in the UAE by opening in Dubai, but seeking partners in Saudi Arabia, selling to Uganda and targeting opportunities in Kenya and Tanzania. It even has a developer’s licence and could move into building low-cost homes itself.
The only thing thwarting Pasinler’s ambitions at the moment appears to be money. The company, which was set up in 2000, operates a factory of around 100m x 100m in the Musaffah industrial area of Abu Dhabi, close to United Precast Concrete’s base.
It has a capacity to produce enough units to make around five villas per day, or close to 2,000 a year.
Some of these systems are then used by its own contracting arm, Dome General Contracting, on villa projects containing 10 units or more.
Smaller orders (including those for single villa projects) are handled by a number of qualified sub-contractors.
The firm is currently in negotiations with a developer of a national housing project to supply up to 3,000 units. To deliver this and other ambitions, however, Pasinler is going to have to convince the company’s current broad base of shareholders to reinvest.
Emirates Buildings employs around 500 staff. When asked for a turnover figure, Pasinler declines to give one, saying it is “not an indication of our success”.
He said that profitability is his target, as it has a base of 75 different shareholders to whom it needs to pay dividends. All of these are Emirati nationals.
“And very high-profile people,” he adds. “We have some from the Royal Family, and we have some from some very wealthy people – in Abu Dhabi and Dubai.”
He argues that the company can be judged as a success because whatever initial capital had been invested into the business had been paid back in cash to shareholders over a ten-year period.
“My aim is to reduce this to seven years,” he says.
However, for now he needs more capital, and is hoping that at the company’s general meeting in June he can convince shareholders to fund growth plans, as he believes the product has a lot to offer in terms of affordability and sustainability.
Its conventional system, which is covered with concrete on site, is light enough for the component parts of a single villa to be loaded into a container. It is already shipping to Uganda, where it was one of only three firms chosen from a shortlist of 40 by the Ugandan government for building low-cost housing.
Part of the reason for this is that it is very simple to erect. Units are put up on site and areas can be cut out to suit for windows or for MEP equipment. Moreover, the walls are load-bearing, which means there is no need for any internal columns or beams. Since it is lightweight, it doesn’t need any piling or major foundation works done and there are no risks of cracks due to settlement.
The lightweight nature also means it can be built manually, without the need for any cranes or specialist equipment.
The in-built thermal insulation also makes it fire-resistant to up to two hours and very energy efficient, he argues.
“Our villas are like a Passivhaus – very highly insulated houses. There is no heat transfer in our out, and all of the MEP and HVAC design sections are reduced.”
As a result, he argues, a typical villa’s energy requirements could be met in the GCC with solar panels. Indeed, the firm is already undergoing a six-month trial where it is monitoring the energy consumption of one of its low-cost villas alongside the energy generated from solar.
He believes that if it achieves a goal of being self-sustaining, it could be used to create isolated desert compounds for locals living in remote areas.
“The same can be applied for existing villas. If you generate more electricity than you are consuming, you will sell it to the government. The meters will work on both sides. This is one of the government initiatives that I believe within one or two years will be realised within the country.”
The one stumbling block to this is the fact that energy prices in the region remain heavily subsidised, meaning that if the spare electricity generated is sold back to the grid at the same price, the payback period for people investing in solar technology will be much longer than in other nations.
“It should be much more attractive. The price of electricity has to be increased in this country if they want this to be successful. In Germany, if you buy the system and you put it in your villa, you cover your investment in five years.
“But here, it is exceeding more than 10 years so it is difficult for an investor to consider.”
Despite this, he says the 3D system is a “green product” as it can be recyclable, and the galvanised wires are more rust-resistant than steel rebar used in reinforced concrete. They can also be left exposed on sites for much longer.
Its insulation layers also have two other advantages for the region. In Saudi Arabia, for example, in a bid to conserve the burgeoning demand for electricity, a decree was passed last year which stated that new homes would only receive a connection to the grid if they are properly insulated.
Emirates Building is looking to capitalise on this, and is currently seeking partners in the Kingdom willing to help build a new factory, but Pasinler said the offers it has received thus far have been unsatisfactory, with firms expecting a half-share in a joint venture merely for providing land.
“We want to invest but they don’t. We want real partners.
“It can be a contractor, it can be a developer who will put money in with us. We have good capacity and the shortage in Saudi is huge.”
Meanwhile, the thick insulation has also proved to be attractive for other reasons to the US army when building accommodation units in Afghanistan.
“The system is bullet-proof. If you shoot, the bullet will stick inside,” he says, adding that it is also resistant to earthquakes.
Pasinler said the company is also in talks with firms in Iraq about exporting the system, as well as targeting hurricane-prone regions.
Most of the villas built to date were installed by Dome Contracting, which has been in business since 1996, but was acquired by Emirates Buildings just after its launch in 2000.
It initially began working purely on government contracts for Abu Dhabi Municipality, the Department of Presidential Affairs and the Armed Forces. Its first big contract to provide 200 units of low-cost housing was extended twice. The work covered villas in Samha, Al Mafraq and Khalifa City B.
The first turnkey contract it gained for a wider community scheme was in Al Ain, where it built Oyoun Village, containing 148 villas, a clubhouse, tennis courts and five swimming pools for Sorouh Real Estate.
Over the past two years, it has been providing 500 villas a year for public housing projects on a shell & core basis, rather than as a turnkey contractor, but it is currently under negotiations to build a further 3,000 being delivered under government programmes.
“It’s for turnkey (but) it depends on the negotiations. We may just provide the system and another contractor completes the rest. It depends on the government authorities and the developer as well.”
It is also “pushing for Dubai” to start a second branch there, and is looking into providing units to the oil & gas sector.
It is already a special grade contractor so is qualified to install buildings, he says, adding that the high level of fire resistance offered by its units make them more efficient than using steel that has to be expensively coated to achieve the same levels of protection.
“Our licence is very large,” he says.
“We also have a developer licence and we can be a developer as well, but it is not the correct time to start development in Abu Dhabi.”
Its future growth, he argues, “will depend on the new capital injection”.
“As GM I did my job and returned all of the money back. So it’s my turn to ask again. If this comes, maybe you will see another developer in Abu Dhabi, or it can be Dubai or Saudi. Who knows?”