Industry

Ford Motor registers 31pct sales growth in GCC

Ford Middle East continues full speed ahead with GCC-wide sales growth of 31 per cent during the first six months of 2010 over the same period last year. SUVs and trucks led the surge with 46 per cent increases, while cars posted 18 per cent growth in sales across the region driven by the new Ford Fusion and Taurus, the company said in a press release. The company is strongly positioned and set to end the year on an upbeat following the arrival of new models in the third quarter, according to Hussein Murad, Ford’s Director of Sales in the Middle East. The Middle East results reflect Ford’s strength globally with the company posting nearly US$4.7 billion first-half net income after tax, an impressive US$3.85 billion improvement over the same period last year. Ford Motor Company’s second-quarter income after tax was registered at US$2.6 billion, an increase of $338 million against US$2.2 billion in the second quarter of 2009.

Sharjah: Industrious emirate

Sharjah is moving to strengthen the foundations needed for industrial expansion, building on existing infrastructure and working to attract further investment to its manufacturing sector, both at the direct production level and for supporting services. Industry is one of the mainstays of the emirate’s economy and that of the wider UAE, with Sharjah contributing around 48 per cent of the country’s entire industrial GDP. Its non-hydrocarbons exports are pushing towards the $1bn mark, accounting for just under 18 per cent of the emirate’s total GDP. With more than 1600 industrial enterprises operating in Sharjah, providing jobs for more than 75,000 employees, the sector has been posting steady growth over the past decade, in line with the government’s program of diversifying the economy. However, unlike some of the other states in the Gulf region, Sharjah has chosen not to invest in massive projects focusing on heavy industry, but instead is targeting light and medium-scale industry. The government is turning away from large-scale projects, which are often heavily reliant on oil or gas, and has taken a different approach, providing the infrastructure needed to do business and create a trade-friendly environment. This support has seen a flourishing of small and medium-sized industries, which in turn provide employment opportunities and encourage private ownership, thereby promoting an industrial sector that is driven by the private sector. The growing development of Sharjah as a regional industrial centre is having an effect on supporting sectors. In early July, for example, logistics giant DHL announced the opening of a new bonded facility in the Hamriyah Free Zone (HFZ). (Source: OBG)

Aluminium Bahrain expanding into new markets

Bahrain’s largest industrial firm, Aluminium Bahrain (Alba), is looking to expand into new markets as it competes to hold its place in an increasingly competitive regional market. In large part due to the global economic downturn, Alba recorded a net loss of US$220 million in 2009, a sharp turnaround from the US$781.9 million profit it posted the year before. Late last month Mumtalakat Holding, the government-owned investment company that includes Alba and all Bahrain’s non-oil state-owned firms, announced losses of US$487 million for 2009. To counter this, Alba is aiming to boost output and broaden its market base. The company has targeted Europe as a major area for expansion, as a number of aluminum producers on the continent are currently scaling back or even halting operations. As part of that strategy, Alba is looking to ramp up production levels, announcing plans to expand capacity to 1.4 million tons by the end of 2014 by constructing a new plant and raising the output of existing lines.

RAK: Beyond construction

Diversification has become the name of the game for RAK’s light industries, as a foreseen fall-off in construction is expected in the near future as demand begins to catch up with supply. One company that has managed to weather the rise and fall of construction demand amid the global crisis is RAK Ceramics. The firm, which was started in 1991, has rapidly expanded abroad and now operates in Germany, the UK, Italy, Belgium, Georgia, Australia, China, India, Saudi Arabia, Sudan, Bangladesh and Iran, with its top production facilities after RAK in China, India and Bangladesh. Like many local industrial concerns, the firm benefits from the low cost of materials (much of the feedstock, from energy to minerals, can be sourced domestically) and a position that allows easy access via ports to the Gulf and beyond. But perhaps the most important ingredient in the success of the local building materials segment over the past two decades is the growth in construction that has accompanied the Middle East’s increasing economic power and population. While RAK Ceramics is perhaps the most prominent industrial player in the emirate, it is not the only manufacturing industry that has profited from the building boom of the last decade. Nearly all of RAK’s light industry – cement, glass production and ceramics – is tied up in some way with the construction sector. The slowdown that accompanied the financial crisis has, therefore, led to slower growth for many of RAK’s industrial companies. Although RAK Ceramics managed to weather the financial crisis well, in large part due to its diversified holdings across the Middle East and Asia, others have seen a more mixed picture: RAK Cement has recently seen its share price on the Abu Dhabi Exchange dip as cement prices remain low and the rate of building is presently subdued compared to pre-crisis levels. However, it also managed to stay in the black throughout the downturn, with profit tripling in the first quarter of 2009 when compared to a year earlier, and a further 15.5 per cent growth reported in the first quarter of 2010. RAK Cement benefits from proximity to RAK’s significant limestone deposits; other cement firms in the GCC usually have to import their raw materials, driving up prices. (Source: OBG)

Kuwait: 90pct of foreign investment seeks industry opportunities

Of all permit requests for foreign investment projects in Kuwait, 90.8 per cent is in the industrial sector, Kuwait News Agency reports according to the official statistics. Figures by the Ministry of Commerce and Industry's Foreign Investment Office showed services as second most attractive sector, with some 9.1 percent, followed by commerce with some 0.1 per cent. The office said, on its website, that 92 per cent of industry related requests were approved, while the figure in services came to some 8 percent, according to the latest statistics. The office also said investment requests came from 13 countries; the US, Switzerland, Holland, France, Britain, Japan, Iran, Sweden, Mauritius Islands, Finland, Jordan, Italy, and Malaysia. Investment for the projects approved came from five countries; Holland at 75 per cent of all approvals, the US at 14 per cent, France with 6 per cent, Britain at 4 per cent, and Switzerland at 1 per cent.