The cable guy

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The global surge in copper prices has meant that making cables has become a very risky business. Sean Cronin talks to Ducab managing director Andrew Shaw and hears how the Dubai-based manufacturing giant is set to cash in on a power-hungry Gulf.

Andrew Shaw keeps one eye on the road during his drive home from the Ducab factory in Dubai every evening.

The other is trained on the roadside at the detritus of Dubai's building industry - specifically the discarded copper cable drums that tell him where his competition is coming from, better than any industry consultant could.

"Us sad people in the cable business spend our days counting drums," says the Ducab managing director, who is spearheading the massive expansion of the Jebel Ali cable manufacturer across the Gulf, after a record year which saw revenues surge 50% to US$653.6m.

Shaw is predicting further sales growth of 50% in 2008 - bringing the company close to the billion dollar sales threshold.

The giant timber drums that litter the streets of the boom town carry the names of some of the world's largest cable companies that supply the arteries and veins of the regional building industry.

As the US construction market slows down, global manufacturers such as Nexans SA, the world's largest maker of cables and Prysmian SpA, the energy cable maker owned by Goldman Sachs Group, are training their sights on the Gulf, where an ongoing construction boom and power crisis has fuelled booming demand for copper wires of every description.

Shaw arrived at Ducab last August from Prysmian, where he was CEO of the company's China business. Before that he ran the Prysmian unit in Malaysia. By curious coincidence, his old office in Malaysia was built by the same company that constructed his new one in Dubai.

On his first day at work, he discovered that both buildings are identical down to the location of the kitchen, boardroom and even the copper decorations hanging from the walls. "It was a case of deja-vu when I walked through the door," says the affable Imperial College London graduate.

Ducab is jointly owned by the governments of Dubai and Abu Dhabi, each of them holding a 50% stake in the venture. The company, which was set up in 1979, produces over 65,000 copper tonnes of high, low and medium voltage cables, mainly for the local market and export throughout the region.

Now Ducab is ramping up production after acquiring a production facility in Abu Dhabi - hoping to see off an expected European invasion of suppliers seeking to shore up falling orders at home with new business in the Middle East and North Africa.

"The global companies have been very busy and the factories in Europe have been running at full tilt - until now," says Shaw. "Right now, we are a little worried that there has been quite a lot of capacity that is suddenly not so busy any more in its home market.

So where will those companies look to expand? They will look at the Middle East.

Ducab makes around 8 million metres of building cable a week from its sprawling factory in Dubai - and it still can't keep up with orders from a seemingly insatiable construction sector.

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