31 October 2007
Abu Dhabi: Saint-Gobain (SG), the world's top plasterboard producer, will establish a $50 million plant in Abu Dhabi as a joint venture with Abu Dhabi- based Sultan International.
With net annual sales in excess of 42 billion euros, and more than 200,000 employees, SG is planning to place Abu Dhabi in its international network of 130 plants worldwide.
"The GCC's plasterboard market has been growing at an annual rate of 30 per cent, as the region's demand stands today at around 50 million square metres, with the UAE alone accounting for 50 per cent of that demand," Stephen Ede, managing director of Saint-Gobain Gyproc Middle East told Gulf News.
The UAE's consumption of plasterboard has grown to five square metres per capita, equivalent to the UK.
Expectations
The $50 million plant constitutes a first phase of the factory, and will produce 30 million square metres of plasterboard annually.
"We intend to export 30 to 50 per cent of our production, and the majority will be sold domestically to cater to the growing needs of modern construction in the country," he said.
SG currently imports 20 million square metres of plasterboard annually to the GCC, mainly from Thailand and Malaysia.
"The logistics efforts and shipment costs for bringing in 1,000 containers are huge, hence it seemed more feasible to establish a plant in Abu Dhabi," Ede said.
There is virtually no competition for the new producer in the region, while the proximity to Asian markets cuts the freight costs substantially, in addition to the low cost of energy, all provide for an excellent edge that qualifies the Abu Dhabi plant to become one of the major suppliers in the company's network in the region.
"This industry has a very high rate in energy and water consumption, and Abu Dhabi's reserves of natural gas constitute a safe haven for us," he said.
The increasing demand of the UAE for plasterboard comes in line with the country's developing construction sector.
"With the dollar weakening, it is quite feasible for us as a European company to invest in the UAE, and our operation here enjoys such advantages that we expect this plant to be one of our most efficient production units," Ebe said.
The engineering studies for the second phase of the project, which will be a ready mix joint filler factory, are underway and the production of the first phase is expected to begin by 2008.
By Ahmed A. Elewa
Gulf News 2007. All rights reserved.
