Monday, Apr 18, 2011
(This story was originally published Sunday.)
ABU DHABI (Zawya Dow Jones)--Al Jaber Group, which is restructuring debt with its lenders, has been hit by a slowdown in government projects and sees flat to small growth in the U.A.E's construction market this year, its chief operating officer said Sunday.
"The government flow of projects had slowed down by 2010 and that affected our ability to attract projects and generate revenues," Fatima Al Jaber told the Citybuild Construction Summit in Abu Dhabi.
"The flow of projects has been getting less and less," Al Jaber said, adding that the Abu Dhabi government remained committed to infrastructure and other projects outlined in its development plan, though the plan's implementation may be slightly delayed.
Al Jaber has long voiced concerns over the slow recovery of bank lending and private sector financing for construction in the U.A.E. In November last year, she said she expected the government to be "the major client for all projects because we still see weakness in the private sector investing in major projects."
In December, Al Jaber Group said it was talking to lenders to alter terms on its debt after finding it difficult to raise finance for some of its 16 billion U.A.E. dirhams ($4.35 billion) worth of projects.
Fatima Al Jaber declined Sunday to comment on the status of the debt restructuring, when asked by reporters on the sidelines of the event.
Al Jaber Group, a diversified family-owned conglomerate with a large construction and contracting business, has focused on cutting costs, choosing projects carefully, and "better utilizing resources," she told the conference. Labor in the Gulf region "is not cheap anymore," she added.
The group sees growth in the construction business coming from Qatar, where it runs a sister company, while it expects the U.A.E. construction market to remain stable or grow a little.
"We're not looking for growth but stabilization," Al Jaber said of the U.A.E. She said the country's construction market was likely to remain stable, or grow up to 5% this year.
"For construction companies, it's been difficult for us to plan ahead," she said. "We thought our region will be less affected than the others, but it turns out it will be affected."
The group is a privately-held company and also has interests in manufacturing, mining and oil and gas. It has more than $5 billion in assets and annual turnover of $2.5 billion, according to a company statement in December last year.
-By Nour Malas, Dow Jones Newswires, +97150 2890223; nour.malas@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
18-04-11 0353GMT
