When it comes to strategic business moves, it’s smart to continue growing because it has a positive domino effect that ends up benefiting many. Well, the Abu Dhabi government’s industrial holding company, Senaat, is doing just that! In fact, the company plans to strengthen investments in the industrial sector by providing it with more resources following very strong results from the first-half of the fiscal year.
Senaat posted earnings that accounted for a 20 percent year-over-year rise in net profit, totaling a stifling Dh453 million. These earnings were totaled before depreciation, taxes, interest and amortization, which exceeded Dh1 billion for the first time ever. With that said, Senaat is sharing the wealth by reinvesting the profits to advance its’ portfolio of companies and launch new projects that are aimed to improve the industrial sector. Chairman of Senaat, Hussain Al Nowais, says the plan is to contribute to the diversification of Abu Dhabi’s industrial sector that will decrease the Emirate’s dependence on oil revenue’s impact on the GDP. It’s important to diversify what the Emirates can bring to the global market and this focus on the industrial sector and improve what the country has to offer.
To date, Senaat has a total portfolio that amounts to Dh26.8 billion and that includes many investments made over the past 10 years that exceed Dh18bn. So far, Senaat has full to partial ownership of six companies that include Ducab, Arkan Building Materials, Al Foah, Emirates Steel and National Petroleum Construction Company. With this in mind, Senaat is also in the process of starting two new companies, which are Al Gharbia Pipe Company and Taweelah Aluminum Extrusion Company with plans to invest Dh5bn over the next two years in the industrial sector.
These developments and new investments are a part of the government’s plans to diversify the economy away from gas and oil. Currently, it makes up roughly 30% of the UAE’s GDP and the industrial sector makes up about half that amount. However, over the next five years, they want the industrial sector to contribute an additional 5 percent. This also falls in line with another initiative to raise the GDP contribution of small and medium enterprises to 70 percent by the year 2020.
With the efforts to diversify away from oil and gas, the UAE is taking the necessary steps to provide the economy with other sustainable sources of GDP contributions and will likely see a big difference in the next decade.