Andrew Shaw – Managing Director, Ducab, United Arab Emirates
The managing director of Ducab, Andrew Shaw, explains in detail how the homegrown organization has helped with the development of the UAE and the surrounding GCC (Gulf Cooperation Council) region, as well as how its acquisition of AEI Cables has helped with the company’s process of internationalization.
What opportunities still exist for the company in the Oil & Gas sector taking into account the fact that production rates for the Abu Dhabi National Oil Company (ADNOC) will reach 3.5 million barrels/day by 2017?
Our scope in the oil & gas sector covers the entire value chain from instrumentation to extra high voltage (EHV) and we are seeing that as oil fields become more electrified the demand for high voltage cables has increased. Moreover, Ducab hopes to further partner with organizations in Abu Dhabi as a result of increased production rates! We believe there is an opportunity in other areas such as serving the recent spike in demand for low, medium and high voltage cables, which has resulted in us working on two major projects in Abu Dhabi and Kuwait with our subsidiary Ducab High Voltage.
How has the organization maneuvered itself in light of today’s volatile market?
As a service company, we have worked on trying to help contractors and EPCs eliminate cost uncertainty by ensuring that our prices remain competitive. As projects and our range as an organization has increased, Ducab has taken on larger portions of the job. Moreover, we have diversified and we now have our own copper-od mill, which has allowed us to hedge our copper exposure. Even when our clients have large packages we are able to offer solutions to hedge our client’s metal exposures and help eliminate cost uncertainty!
In light of today’s oil & gas market prices, there is an emphasis on maintaining costs at competitive rates. We have come up with cable material alternatives for our clients to provide options for our clients to lower costs. For example, as an alternative to the traditional led sheath cables we have offered polyamide sheath for customers who want to optimize the electrical aspect of the job. We have built our reputation as a trusted partner in the cable arena, which is another advantage we offer to our clients because we are able to work with clients and identify issues and propose solutions that are cost effective and meet the needs of the local market. I believe that this can be attributed to being a UAE based organization with a clear understanding of the regional market and we understand how to optimize our client’s cable specifications.
How can clients unlock more value by partnering with Ducab?
We view our dealings with customers as partnerships and possess over three decades of designing and making cables in the Middle East. Ducab adds value by solving problems our customers face ranging from cable design to site access. We offer logistics solutions because we possess large facilities both in Dubai and Abu Dhabi and are able to lower costs for our customers by providing a range of services across the value chain. We offer a technical and supply chain partnership to lower costs across the complete supply chain by offering alternative metals for cables and taking it one step further by simplifying solutions by using our base in the UAE.
Moreover, Ducab understands the needs of our clients across the various regions we service and we adapt accordingly. For example, Saudi Arabia is a large nation that is spread across a vast area of land, versus the UAE, which is urban and condensed. Large areas that are more spread out can more easily use aluminum as an alternative to copper when making cable wires because aluminum requires wider, more bulky cables than copper ones. In order to engage new customers from Saudi Arabia to the United States, Ducab is building a $60 million aluminium plant in Abu Dhabi because we are seeing a demand for customers who require more cost effective cables suited to their environment.
Provide our readers with an overview of the organization and where it stands today with regards to its involvement in oil & gas.
The organization has been around for 36 years and participated on large projects in the UAE, like the Burj Khalifa and collaborated with players in Abu Dhabi’s oil & gas industry, which have contributed to the growth and development of the company over the years. Currently, our diverse portfolio of projects covers a broad range of industries from energy to powering prestigious palaces, but the oil & gas industry makes up about 15 to 20 percent of our current portfolio. Our projects in the oil & gas industry are mainly in onshore facilities and we have supported projects, such as the Ruwais expansion and the Borouge expansion, the clean fuels projects in Kuwait, as well as other projects in Egypt and Oman. Over the last year, Ducab has won over $130 USD worth of oil & gas related projects in Abu Dhabi and Kuwait, which have allowed Ducab to keep a strong foothold in the industry. As the oil & gas market fluctuates, we are strategizing on how to continue our involvement in the industry over the next few years.
What special company features can you attribute to Ducab’s success?
Part of Ducab’s success can be attributed to the fact that we are a local company and our main focus is in the Middle Eastern market where we proudly possess a strong foothold. We have five factories in the UAE and have the largest capacity to provide cables in the oil & gas sector in the Middle East. There are many competitors and importers, but in terms of capacity we are the only company in the region that is able to provide special designed cables with metallic and nylon sheaths required to endure extreme temperatures in the region. Moreover, we can take large orders from Engineering Procurement Construction (EPC) companies and manufacture the orders in-house, unlike some of our competitors who might outsource their orders. More importantly, we believe there exists an opportunity to maximize our shareholders profitability and support our clients on large projects, such as Petrofac. Our vast clientele can be attributed to the capacity, track record and capability Ducab has been able to build over the last seven years by meeting the needs of our clientele.
How has the evolvement of the organization helped in its internationalization process?
Since being founded in 1979 by the government of Dubai as a joint venture with BICC cables, the organization is now owned by the Investment Corporation of Dubai (ICD) and Abu Dhabi’s Senaat, has experienced tremendous international growth. We are involved in projects in the MENA region, as well as oil wealthy Central Asian nations, like Kazakhstan. Being strategically located in the UAE allows us to have accessibility to all major airports around the globe. Moreover, our Dubai facilities are located near the Jebel Ali Port and our Abu Dhabi facility is near the Khalifa Port, which allows us easy access to our raw material orders from two of the world’s most efficient ports.
How has the acquisition of AEI Cables helped shape the direction of the organization?
In March 2014, it was announced that Ducab bought the United Kingdom-based AEI Cables, its first overseas manufacturing plant and acquired all the manufacturing assets of AEI, along with a workforce of 200 people. AEI Cables is the right fit for the direction of the market because it allows the organization to have a strong foothold beyond the Middle East, as well as maintain a greater grasp on the local demand of our clients. Through AEI Cables, Ducab is able to fast track the expertise development in our factories in the UAE, which is an especially strategic acquisition since the demand for specialist cables in the region has grown. Moreover, AEI adds to Ducab’s vast catalog of products and now carries a broad range of railway, tunneling and naval marine cables, among many others. The conglomerate of companies unified under the name Ducab will continue to promote the growth of the GCC and support the local diversification and growth of the Emirati economy!
How have you expanded your product range over the years to serve the needs of your local Emirati clients?
Since starting off as a local company over three decades ago, we have been able to diversify our product range with the development of the local economy. We have developed more specialized product ranges in oil & gas by designing rubber cables and marine cables, for example, and used them in local projects, like the Barakah Nuclear Power Plant. The design of these cables has been a reaction to local market needs because they are lighter in weight and they are easily transportable.