Strength in Numbers

Recently, Ducab broke ground on a $59 million new factory in Abu Dhabi. What kind of opportunity will this create for Ducab moving forward?

The factory will produce aluminum, and it gives us several strands of opportunity. First of all it is going to be cost effective for the aluminum world, and we are going to be associated with the world’s single largest smelter. We will be taking hot metal and casting directly from that as well as specific alloy cables. We see a slow substitution of copper for aluminum in the cable business, which is what is happening elsewhere in the world. We also have a root in the market already through our existing copper cable customers. Almost all of our existing copper customers buy aluminum as well; therefore, we can go to our existing customers and offer them additionals product. It is a new business widening the market and addressing the fact that aluminum is growing in the Middle East. We are going to be substituting quite substantial imports of aluminum into the Middle East through our factory.

Ducab also recently bought the UK-based AEI cables company. How will this acquisition positively affect export sales and domestic sales?

The AEI acquisition was all about opportunity. It was a small business but a specialized one. It makes niche cable products, and we are proud to be supplying cables for the UK Royal Navy’s aircraft carriers and for the submarine and underground programs. We are supplying specialty cables, and each of these specialty niches has to be custom designed and meet approvals. They also want to see track records, and what AEI has given us are many more pages to our catalog of items that are already approved and have a proven track record that would have taken us years to develop. It also has its own compounding experience and plant where it manufactures the special rubber compounds used in these cables. It brought a lot of knowledge and experience, and we will continue to produce in the UK as well as in Abu Dhabi. It provides many opportunities to start selling cables that otherwise would have been imported, and it also allows us to enter other markets, such as rail. We now offer a full line of railroad products.

How would you describe your domestic and international growth strategy in moving forward?

We want to first of all continue growing as the Middle East is growing. We want to capitalize on the growth we are getting and are seeing in the UAE and the GCC. Therefore, we will maintain our market share in the UAE and growing our market share in the GCC. That is geographically the range of the expansion we want to continue domestically. You have to start at home, and we have seen tremendous growth in Dubai and Abu Dhabi. In Saudi Arabia, we are a lot smaller and see a tremendous opportunity for growth there. We are seeing an opportunity for taking even a small market share, which is huge because the Saudi market is quite large and still growing. The other strand to our growth strategy is not only expanding geographically, but also in our product lines, which is where AEI fits in. We want to have a broader product range, and this ties into what is happening elsewhere in the GCC in expanding outside of oil and gas. Industrial applications need industrial cables, and now we are able to offer the kinds of cables to meet those needs now as we did with railways. This will give us more opportunities to get into niche markets outside of construction.