The United Arab Emirates has been setting its sights on finding new ways to stimulate the economy by diversifying away from crude oil. The mission contributes to the overall efforts of national diversification with some initiatives already being set in motion like an entrepreneurship program that is aimed to give Emirate citizens the chance to bring their ideas to life with the resources they need to develop unique enterprises all over the country. With that being said, Senaat, a state-owned holding company located in Abu Dhabi, entered a joint venture with two Japanese firms.
The venture involves the development of a Dh1.1 billion steel plant to supply and manufacture steel pipes for customers at the Khalifa Zone of Abu Dhabi, also known as Kizad, that work in the energy and construction industries in that area. Chairman of Senaat, Hussain al Nowais, says the plant will create 370 new jobs which will support the growth in the employment sector. The two Japanese firms joining Senaat are Marubeni-Itochu Steel and JFE Steel with plans to have the plant operational by 2018.
Expectations for the new steel plant company, Al Gharbia Pipe, are high with the anticipated production capability hitting 240,000 tonnes a year and with the prospects of reducing UAE’s dependence on steel pipes by such a large percentage, the plant could export 40% of its production. As the steel plant demonstrates a positive step towards crude oil diversification, the two Japanese firms will hold 49% stake in the venture, leaving Senaat as the majority shareholder.
Over Dh16 billion has already been invested in the metals sector over the past five years from Senaat with another Dh5 billion planned for the next two which makes the Al Gharbia Pipe one of the most recent projects. It’s no surprise that Senaat is moving forward with more diversification projects as it manages more than Dh6.9 billion in industrial assets and has more than 15,000 employees.