Ducab: MEED Assessment

13 July 2010

Having its own copper mill and a polyvinyl chloride compounding plant means the company has tight control over production costs

Ducab is a successful product of Dubai’s industrialisation drive, which began in the mid-1970s. During the past 30 years, the firm has grown to take a significant share of the local and regional cables market. The high quality of its products are recognised throughout the industry. Its sales surged over the past decade, rising from $27.3m in 1998 to a record $899m in 2008.

Ducab key numbers

  • $45m Total cost of Ducab’s copper mill
  • 900 Number of staff employed by Ducab
  • 50 per cent Ducab’s share of the UAE cables market

Inevitably, the firm was impacted by the collapse of the construction market in Dubai. Revenues dropped some 27 per cent in 2009 to $653m. But Ducab’s earlier diversification into other cable markets, such as oil and gas, petrochemicals and power cables has helped it to weather the storm.

As the company now reaches the end of a major expansion drive, it is well-placed for future growth. The opening of the extra high voltage cable plant - the first facility of its kind in the UAE - is expected to contribute about $270m in sales each year.

Integrating production processes has been a core strategy at Ducab in recent years in order to shield itself from raw material price rises. The global financial crisis has eased some of those pressures, but copper prices are still high.

Having its own copper mill in addition to the polyvinyl chloride compounding plant means Ducab is able to exercise tight control over production costs. This sets it apart from other cable makers in the region and will help it fight off competition as other cable plants open in the GCC. Sales of copper rod surplus to internal requirements are also providing a new income stream for the firm.

Ducab’s core strengths are its ambitious management team and supportive shareholders. Their commitment to the company has been demonstrated repeatedly in the past decade. For this reason, funding for further investment opportunities will doubtless be made available as and when they arise.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications