Abu Dhabi, March 19, 2006 (WAM) -- Ali & Sons Company LLC is in the process of setting up a Dh60 million Autoclaved Aerated Concrete (AAC) blocks plant in Abu Dhabi together with other strategic investors, including Al Qudra Holding.

Injaz Mena Investment Company PSC, a leading UAE investment bank, has arranged Dh25 million in capital for the manufacturing unit.

Injaz Mena is also the financial advisor for the project.

The new plant, Spectrum Light Block Factory LLC, will operate at an expandable capacity of up to 1,000 cubic meters. Spectrum will be set up in the Abu Dhabi Industrial City, where the investments to date are estimated at Dh5.5 billion.

"Outlook for the construction sector in Abu Dhabi and the UAE remains positive," said Shames bin Ali Al Dhahry, Ali & Sons' Managing Director.

"This sector has been a primary beneficiary of the boom in non-oil development over the past decade, and has shown growth every year, with the exception of 1999, when there was a modest contraction.

The series of new and ongoing large-scale projects indicate that the sector will show robust growth over the coming years. We expect to capture over 30% of the AAC blocks market in the UAE," he added.

According to Shariq Azhar, Injaz Mena's Director General, "the UAE has become an established regional commercial hub and continues to experience growth both in terms of business and leisure visitors.

The country's population is increasing rapidly and presents a growing market. Overall, we expect a continued growth in demand for building materials in general and AAC blocks in particular".

AAC products belong to the building materials family and are the subject product of the new plant. According to local contractors, AAC block is the best thermal block available in the market in terms of weight, features and durability. At present, there is only one main supplier in Abu Dhabi that manufactures and distributes AAC blocks. Three to four new AAC block factories may be established in Dubai and Abu Dhabi soon.

"There are several mega projects now under way in the UAE, including housing and infrastructure development schemes. We believe that these projects alone will generate a growing demand for building products, including AAC, in the next five years," Mr. Azhar concluded.