Ducab is to become the first manufacturer of rubber cables in the Middle East and North Africa as it seeks to meet demand for special cabling from the region's industrialisation push.
The power cable maker made the disclosure as it reported a 10 per cent rise in profits last year over 2011. Ducab did not disclose the figure for its profits. The company is jointly owned by Investment Corporation of Dubai, a sovereign wealth fund owned by the Dubai Government, and Senaat, an Abu Dhabi state-owned industrial holding company.
Ducab also announced the appointment of Jamal Al Dhaheri, the chief operating officer of Senaat, as its new chairman.
A key priority for Mr Al Dhaheri is to help Ducab to diversify its product mix beyond its primary revenue source of PVC or cross-linked polyethylene insulated cables, as well as copper rods and wires.
As part of the drive, the company intends to begin making rubber cables in two months from its factory in Mussafah, Abu Dhabi.
"The fact we are developing local production of these products reflects our ambition to broaden our product range but also the changing economies of the UAE and the Gulf in general," said Andrew Shaw, Ducab's managing director.
"As the region builds industries and builds railways there is going to be growing demand for these specialist products and we want to be ready to support local markets and it also gives us a product we can export,"Mr Shaw added.
The flexibility of cabling insulated with rubber and its ability to withstand heat, chemicals and oil makes it suitable for use in areas such as railways, shipbuilding and heavy industry. Emirates Steel is already a user of rubber cables.
Ducab's financial performance last year was driven by strong overseas sales, helping to offset weaker demand in its home market. Cable exports rose 42 per cent last year.
Demand was particularly robust in the post-conflict economies of Iraq and Libya. Growth in Iraq accelerated seven times.
"Our success in 2012 was the result of successful expansions in new markets and introduction of new products coupled with tight financial control," said Mr Al Dhaheri. "Ducab increased market share in the core market of the UAE despite increasingly difficult market conditions in 2012."
Revenues of Dh4.2 billion were lower than the previous year, despite a small rise in cable volumes. Ducab blamed the dip on a 10 per cent drop in copper prices. The board agreed to boost the dividend to shareholders by 25 per cent.