Monday, Sep 07, 2009
DUBAI (Zawya Dow Jones)--Dubai-based Arabtec Holding (ARTC.DFM), the U.A.E.'s largest construction company by market value, Monday said it will set up a new concrete firm in Saudi Arabia as the construction firm continues to diversify away from its domestic market and secure a growing number of contracts in the Kingdom.
Arabtec board members decided to set up the new firm at a meeting Sunday, according to a statement on the Dubai Financial Market Web site.
"The board reviewed and approved the proposals presented for establishing the company, Austrian Arabian Ready Mix SA LLC that will provide ready mix concrete for the Saudi market," the statement said.
The board also approved the transfer of some of the assets of Austrian Arabian Ready Mix Concrete LLC to Saudi Arabia to establish the new operations, it said.
Austrian Arabian Ready Mix, which is 100% owned by Arabtec Holding, is currently based in Dubai and also has factories in Abu Dhabi and Umm Al Quwain, according to Zawya.com.
Arabtec is diversifying away from dependence on contracts in Dubai and the United Arab Emirates where the building industry is under pressure from a collapse in real estate prices.
In March, Arabtec Construction, a unit of Arabtec Holding, signed a deal with a unit of Saudi Bin Laden Group and Prime International Group to set up the joint venture firm Arabtec Saudi Arabia to tap building work in the Middle East's largest economy.
At the time, Arabtec Holding Chief Executive Riad Kamal said the company plans to have a turnover of SAR1.5 billion Saudi riyals ($399.9 million) in its first year of operations, and an annual turnover of between SAR3 to SAR5 billion in the next two to three years.
In June, Arabtec Saudi Arabia won a SAR2 billion contract to build the Lamar Towers project in Jeddah.
On Thursday, Kamal told Zawya Dow Jones that the firm hopes to conclude several contracts by the end of the year and is currently tendering for projects in countries such as Egypt, Lebanon, Morocco, Algeria and Lebanon.
Arabtec shares closed up 1.4% at AED2.95 on the Dubai Financial Market Sunday.
By Stefania Bianchi, Dow Jones Newswires; +971 4 3644967; stefania.bianchi@dowjones.com
Copyright (c) 2009 Dow Jones & Co.
(END) Dow Jones Newswires
07-09-09 0540GMT
