ECONOMIC DEVELOPMENT - UAE Interact

116UNITED ARAB EMIRATES YEARBOOK 2006ECONOMIC DEVELOPMENT117Dubal is the largest single-site aluminium smelter in the region and the largestsingle non-oil contributor to Dubai’s economy. The company’s pure grade metalis sold to customers across the world, from Japan and the Pacific Rim, to the US,Europe and the Middle East. The company is implementing a ten-year growthplan that involves boosting production and strengthening its position by strategicinvestments in overseas projects. Demand for aluminium itself has been growingat a rate of 4 to 5 per cent per annum.Dubal produced 683,000 tonnes of high grade aluminium in 2004 (90 per centof capacity), an increase of 40 per cent against 2003 and sold 743,000 tonnes, anall time record. Meanwhile, Dubal’s unit cost of production is the lowest among the20 largest aluminium producers in the world. In May 2005 Dubal commissionedits new Potline-7 expansion ahead of schedule and under budget. The expansionincreased Dubal’s production by 74,000 tonnes to an unprecedented total outputlevel of over 761,000 tonnes per annum.In August 2005 Dubal commissioned a new ingot casting machine, the Dh100million Casthouse-3 unit, the first of its kind in the region. This has a capacity toproduce 80,000 tonnes per year of hot metal in different alloys that meet individualrequirements of customers in Asia, Europe and North America. Dubal has alsoreserved an option on two more such casting machines. The casting processplays a critical role in aluminium production by converting molten aluminium tosaleable product. Dubal’s casting system is a combination of continuous and batchprocesses and operates 24 hours a day with a variety of more than 200 differentproducts and a total annual casting capability of over 1 million metric tonnes.Also in August 2005, Dubal announced a massive capacity expansion projectcosting over Dh1 billion (US$284 million) that will make the UAE a majorpowerhouse in the global aluminium industry. The latest expansion project isadding an additional annual capacity of 100,000 tonnes of hot metal, raising itstotal hot metal production capacity from 761,000 to 861,000 tonnes per year.This project is phase one of a three-phased expansion plan that forms part ofDubal’s long-term strategy. Environmental protection remains a key area of focusfor Dubal and a state-of-the-art fume treatment system costing Dh110 million(US$30 million) will be installed as part of this expansion, which is scheduled forcompletion by the fourth quarter of 2006. The project will add 128 cells moreto the recently completed Potline-7, bringing the total to 248 cells. Plans arealso afoot to add another 36 cells to Potline-9, which was completed in 2003,once again bringing the total cells for this Potline to 248. Dubal also announcedthat it would award over 40 per cent of this project to local contractors; a move thatwas expected to boost job creation and benefit the local economy, strengtheningthe manufacturing base of the country.The company is already one of the world’s largest smelter plants and is exportingprimary aluminium products to almost 50 countries. In early March 2005 Dubalentered into a provisional agreement to set up a Dh3.67 billion joint venture to builda combination bauxite mining and alumina refinery in India’s Orissa state inpartnership with Larsen & Toubro, one of India’s leading diversified engineeringand construction conglomerates. In April 2005 Dubal and Global Alumina ProductsCorporation (Global Alumina) entered into a Memorandum of Understanding (MoU)under which, if all conditions are met, Dubal will make a substantial investment inGlobalAlumina.CABLE MANUFACTUREDucab, set up in 1979, is jointly owned by the governments of Abu Dhabi and Dubaiand produces mainly low-to-medium voltage power cables and auxiliary products.It is the leading manufacturer of high quality power cables in the Middle East andis involved in supplying electrical cables for the UAE’s electricity grid, as well asexporting to other regional and global markets. The company has maintained anaverage annual sales growth of 15 per cent since 1981 and recently expanded itsbusiness by entering into new export markets in Iran, India, Jordan and Tanzaniawith major projects and distribution agreements.Ducab’s sales revenues increased by 30 per cent in 2004 to Dh687 million. Totalorders reached Dh719 million, a rise of 45 per cent over 2003. Ducab’s specialisedfire-resistant cable, developed for Delhi Metro, has become its latest flagshipproduct. In 2005 it was awarded a contract with the UAE Federal Electricity andWater Authority (FEWA), worth Dh36 million, for supplying FEWA with 33kV singlecore cables for its expanding power grid network in the Northern Emirates. Ducabwill supply 450 kilometres of single core copper, 500-square-millimetre cablesduring the year.Ducab has opened a second production plant in Abu Dhabi, built at a cost ofDh125 million. The 25,000 tonne capacity plant in the Industrial City of Abu Dhabiwill increase the company’s production capacity to 65,000 tonnes per annum. Tokeep pace with the growth in demand for cables, due to the ongoing developmentand construction activities in the region, the company has been considering settingup a third manufacturing unit outside the UAE or forging joint ventures with foreignpartners. Ducab cables are manufactured in compliance with international qualitystandards such as the British Standards (BS) and International ElectrotechnicalCommission (IEC).GOLD AND JEWELLERYThe UAE’s gold consumption increased from 88 tonnes in 2003 to 96 tonnes in2004. In 2004 Dubai imported 503 tonnes and re-exported 260 tonnes, makingit the world’s second largest re-distributor of bullion. It has taken the lead inpromoting the industry and has recently established a number of special centresassociated with gold and jewellery. The Dubai Metals and Commodities Centre