Abu Dhabi government-owned General Holding Corporation (GHC) plans to invest AED5.8bn ($1.58bn) in the short-term in three industries to boost manufacturing as the oil-rich emirate tries to diversify its economy, its chairman said on Saturday.
The plans include AED3bn to expand capacity at Emirates Steel, AED800m in downstream aluminium extrusion and AED2bn in manufacturing seamless pipes for the oil and gas industry.
GHC, which has industrial assets totaling AED23.7bn, has interests in sectors including steel, oil and gas fabrication, cables, food and building materials. It is eyeing new industries such as aluminium and copper.
“Our strategy is to help speed industrial growth in Abu Dhabi which is targeting a 25 percent contribution from industry to the emirate’s GDP by 2030. Today, it is below 15 per cent,” Hussain al Nowais told reporters.
Financing for the investments will be a combination of debt and equity, he said, adding GHC plans to raise $600m in project finance over two years. It has appointed BNP Paribas as financial advisor.
Last year GHC borrowed AED660m ($180m) from banks and invested AED2.7bn in various industries.
“Our debt-equity ratio is 1:1 and we have cash generated from profit. Debt could include bank borrowing, export credit agencies or even bonds,” he said.
GHC also said it made a net profit of AED1.5bn in 2011, up 15 percent on the previous year, driven by sales and cost control. The profit came largely from two of its flagship firms, Emirates Steel and National Petroleum Construction Company (NPCC).
GHC, set up in 2004, owns a total of eight companies in the industrial sector, two others of which are listed on the Abu Dhabi Securities Market (ADX).
It may consider one or two more companies for a public offering in the short-term, once they achieve their targets, said Al Nowais.
Abu Dhabi, capital of the UAE an OPEC member, is investing billions of dollars in industry, tourism and real estate as it diversifies its economy away from oil.
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