Tuesday, Sep 08, 2009
Gulf News
Dubai: Arabtec has been given the go-ahead to establish a new concrete firm, the Austrian Arabian Ready Mix Concrete LLC (AAC), in Saudi Arabia in line with big plans to expand in the kingdom.
The company's stock rose 5.76 per cent, closing at Dh3.12 following the announcement posted on the website of Dubai's Financial Market (DFM).
The AAC is already in operation in Dubai but will now be going to Saudi Arabia due to the increasing number of projects underway there.
Arabtec's board of directors also gave approval to the "transfer of some of the assets" of AAC to Saudi Arabia in order to start the new operations, according to a statement on the DFM.
These assets include equipment such as machinery and concrete, said a source close to Arabtec.
Riad Kamal, chief executive of Arabtec, will oversee the establishment of the new company in Saudi Arabia, the statement said.
Kamal was unavailable for comment.
Due to the dwindling number of large contracts available at home, Arabtec is eyeing North Africa as a potential source of opportunity, in particular Libya and Algeria, Kamal said in May.
As Arabtec is the UAE's largest contractor by market value, Kamal forecast more than 50 per cent of its revenues coming from outside Dubai over the next three years.
Saudi Arabia in particular offers vast construction possibilities. Around 11 per cent of Arabtec's Dh30.2 billion contract backlog is in the kingdom, according to a recent report by Al Mal Capital.
Arabtec has already expanded its reach in Saudi Arabia through joint venture Arabtec Saudi Arabia, with Saudi partners, CPC Services Company, a member of the Saudi Bin Laden Group and Prime International Group Services with a capital of 150 million Saudi riyals (Dh146.85 million).
Arabtec Saudi Arabia is now working on the 1.5 billion riyal Princess Noora University in Riyadh and also the two billion riyal mixed-use Lamar Towers project in Jeddah to be ready in 2012. AAC will be providing the concrete for these projects.
By Suzanne Fenton, Staff Reporter
Gulf News 2009. All rights reserved.
