By James Buckley
Ducab has responded to increased cable demand by building a new factory in Abu Dhabi.
Cable manufacturer, Ducab has announced its biggest expansion since its conception, boosting capacity by around 50%.
The project, which is already underway, will be completed by the end of 2008, with the first equipment being installed during this year. With a total investment of approximately AED 660 million, the expansion will focus on the manufacture of power cables, building wires and specialist designs for oil, gas and petrochemicals industries.
"Because of the enormous growth in the region, particularly the UAE, we need a great deal more production capacity," said Colin Paskins, managing director of Ducab. "We are increasing our capacity across our range up to the largest sizes of low voltage cable. Investments in areas like oil, gas and petrochemicals...have created a strong demand for power cables and this will continue for a considerable time."
Ducab plans to reserve a proportion of its new capacity for exports. Last year, 25% of the company's output was exported.
"Most of the growth we hope to see between now and 2009 will be in the local market, but we need to respond to exports," said Paskins. "We already do significant business with the neighboring GCC states and further afield. If the free trade agreement materialises between the GCC and the EU, there will be greater opportunities to trade with Europe."
In an interview with
Oil & Gas Middle East
, Paskins said he sees the current cable demand lasting for at least a decade, but warns some companies are too optimistic about the pace with which manufacturing can really be done. This is heightened by competition for resources, which are becoming increasingly scarce.
"The movement of commodities will always a have a disturbing effect on the market," he said. We usually price our cables with a copper variation clause in the quotation, where the material content of the cable will depend on the copper price on the London Metal Exchange on the first dealing day after we receive the order."