The construction industry in the UAE received a much needed vote of confidence yesterday when steel manufacturer United Steel Industries announced it was resuming work on what will be the largest steel mill in the country.
The company has appointed the construction consultancy Turner & Townsend as project manager to build the stalled 145,000 square metre steel rolling-mill project in Fujairah to cater to the needs of construction companies restarting work in the emirates.
Seen by many as a key bellwether for the sector, when complete the factory will produce the type of steel used to fortify concrete structures used in towers and roads.
The ambitious scheme, which when completed will have the capacity to produce 1 million tonnes of metal-roll a year, was initially started in October 2006 but was placed on hold in November 2008 as demand for building materials in the region declined in the wake of the global financial downturn.
Yesterday, the company said work on the project, located in the Fujairah Free Zone, close to Fujairah Port in the Northern Emirate, was due to begin this month.
"It seems the construction industry in the UAE is on the up once more," said Turner & Townsend's UAE project management director Joanne Stephens.
"By specialising in the steel supplies used to fortify cast concrete structures and elements in the construction of houses and high-rise buildings, as well as for other industrial buildings and infrastructure projects like bridges, fly-overs and tunnels, the manufacture of a new plant in Fujairah is a clear indication the sector is returning.
"The UAE's rapidly growing and urban young population constantly fuel demand across the real estate, infrastructure and utilities segments of the market," Ms Stephens added. "Nevertheless the legacy of the economic crash means that in the current climate every development needs to have its commercial position safeguarded; and this is where Turner & Townsend adds most value."
The new factory will be used to produce both reinforced steel bars and steel wire. The steel will be sold both within the UAE and exported. The new plant will provide 500 jobs in the Fujairah region.
Turner & Townsend will help to construct both the factory building and associated offices as well as play a role in monitoring the scheme to ensure the build programme is completed on time and within budget, it said.
lbarnard@thenational.ae
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
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The five pillars of Islam
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The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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Urawa Antonio 18’, 60’, Kashiwagi 26’