Industry

Qatar: Industrial intent

After several years of substantial economic expansion, Qatar was recently named the wealthiest nation in the world in terms of GDP per capita. However, with many of the oil and gas related projects nearing fruition, focus is turning to manufacturing and other non-hydrocarbons businesses and the role they will play in the local economy. In mid-June the US-based business magazine Global Finance reported that Qatar’s per capita annual GDP (based on purchasing power parity) amounted to just over $90,000, making it the wealthiest country in the world by this measurement. This achievement caps a period of rapid economic expansion. In 2007 and 2008 real GDP growth exceeded 20% per year. In 2010 this figure amounted to 16.3%, and the economy is expected to increase by a further 20% this year, according to the IMF. Indeed, the Fund has called Qatar “one of the fastest growing economies in the world”. Expansion is expected to continue into the future, albeit at a slower pace. The IMF has projected that GDP will increase by 7% in 2012, followed by 4% in 2013. However, unlike in recent years, the non-hydrocarbons sector is expected to expand while projections show that oil-and-gas economic activity will stabilize. Samba Financial Group, a Saudi banking firm, noted this economic shift in a recent report. Much of this expansion will be led by the state-backed Industries Qatar (IQ), which controls most of the country’s petrochemicals and metal production capacity. In late April, IQ released its first quarter results, reporting revenues of QR4 billion ($1.1bn). Net profits amounted to QR2.1 billion ($567m), representing a 73% increase over the same period in 2010. These financial results came on the back of strong showings by its steel unit, along with improved earnings from its petrochemicals and fertilizer companies. With IQ committed to investing a further QR12 billion ($3.3bn) over the coming five years, it is expected to continue to lead the sector. However, smaller private manufacturing operations are being encouraged to play a larger role in the economy too. Source: Oxford Business Group

US court denies key petition by Agility

A US appeals court has denied a petition by Agility in a legal setback for the Kuwaiti logistics firm that faces prosecution on charges it defrauded the US Army in multibillion-dollar contracts. The court denied a ""Writ of Mandamus"" petition in a decision that, coupled with a ruling last week by the court, appears to effectively clear the way before a pre-trial phase of the case. ""The petitions for Writ of Mandamus are denied,"" said a brief notice by the US Court of Appeals for the 11th Circuit, which is based in Atlanta. Agility was the largest supplier to the US Army in the Middle East during the war in Iraq. Charges that it overcharged the Army over 41 months on $8.5 billion in supply contracts make the case politically sensitive in Washington and Kuwait. Agility argued the suit was invalid because prosecutors only served it on the company's US subsidiary and not on the Kuwait-based parent company, Public Warehousing Company aka Agility. Source: Reuters

ARSD signs $79m deal for Saudi mine

Arabian American Development (ARSD) has signed a three-year, $79 million contract with China National Geological & Mining Corporation (CGM) for the operation of the surface works of the Al-Masane Al-Kobra (Amak) mine. This contract is in addition to a five-year contract with CGM, that totaled $125.0 million which covered the engineering, design, mobilization, rehabilitation of existing mine workings and production work and included a provisional sum of $8.1 million for equipment that CGM has the option to provide. Arabian American is the original developer and now a 37% equity owner of the Amak mine project. The company also announced that the Amak mining operation has entered into an agreement with Walid S Bugshan & Partners (Metafco), for the design, supply and construction of a seaport storage facility in Jizan, Saudi Arabia. ""This contract is another major milestone for the Amak mining project which is nearing completion in the Najran Province area of southwest Saudi Arabia,” said Nick Carter, president and CEO of Arabian American. The $79 million cost of operations over the three-year contract is in line with the previous cash flow expectations based on 2000 tons per day and includes approximately $29.4 million for reagents to be used in the mill process. As previously reported, Amak is now in discussions with several major commodity trading companies who have expressed interest in purchasing the off-take of concentrates that will be produced when the mine starts production at the beginning of 2012,” he concluded. Source: TradeArabia News Service

Qatar's first carbonate calcium plant to start trial run soon

Qatar’s first carbonate calcium plant will start trial operation at the end of this month, the Qatar National Cement Company (QNCC) said recently. The QR22 million plant located in Umm-Bab area is specialized in the production of calcium carbonate for use in water treatment operations and has been set specifically to meet the needs of the Qatar Water and Electricity Company (Kahramaa), according to Mohammed Ali Al Sulaiti, the General Manager of QNCC. He told a news conference at the company’s Head Office that Kahramaa will be purchasing the calcium carbonate plant’s production for a period of 25 years and that the carbonate calcium plant will also be supplying raw material required by the Ras Girtas Power plant in Ras Laffan Industrial City. Al Sulaiti also said that QNCC was steadily growing and expanding, noting that a new cement mill with designed capacity of 130 ton/hour will be installed to replace the two cement mills of Plant No.1 which will add value in terms of quantity and quality of cement production of all kinds to meet the market demand. QNCC daily sales of cement stand at around 12,000 tons, 93% of which consist of clinker. However, the company said it has additional grinding capacity, which can be used depending on market demand such as grinding imported clinker. Source: The Peninsula

Tabreed repays $200m sukuk

The National Central Cooling Co (Tabreed) has announced it has repaid in full a Dh735 million ($200m) sukuk that was due to mature on July 20, Khaleej Times has reported. Tabreed issued the sukuk in July 2006 and the total amount paid to certificate holders of the bond was Dh735 million, the company said. The move will reduce the company's debt pile and financing costs following a successful completion of the recapitalization program in April this year, Tabreed said. Source: Khaleej Times

Saudi Steel reports 15.1% drop in net income

Saudi Steel Pipe Co posted 15.1% fall in its net income for the second quarter of 2011 to SR21.34 million, compared to the same period last year of SR25.15 million, Arab News has reported. The company said the decline was due to poor market demand particularly in oil pipes. Sales for the first six months of 2011 climbed to SR7 million from SR3 million achieved during the same period of last year. Source: Arab News