Recent weeks have seen a number of industrial companies in Abu Dhabi such as Abu DHabi National Chemicals Company (Chemaweyaat) and Emirates Steel International (ESI) revising plans to invest in new production facilities at Taweelah in the north of the emirate in favour of alternative locations elsewhere in the emirate.
The location rethinks make sense for a number of reasons.
In the case of Emirates Steel (ESI), for example, there is a compelling case for moving its planned project closer to the company’s main production site at Abu Dhabi Industrial City at Mussafah in Western Region, from a logistics perspective as well as possible savings through integration.
ESI has not said why it is considering moving its steel plate project away from its planned metals park at Khalifa Port and Industrial Zone (KPIZ) at Taweelah. Perhaps, after missing out on the acquisition of the Shadeed Iron and Steel plant in Oman from Abu Dhabi’s Al-Ghaith Holdings, ESI is revisiting earlier strategies to see if they can be improved upon.
In today’s volatile operating environment, this is a positive way to approach projects.
ESI was clearly disappointed to miss out on the Shadeed deal. The plant in Oman was almost fully complete and the site has enough space for at least two capacity expansions. In May, India’s Jindal bought the facility with a last-minute offer, overturning what was seen as a foregone conclusion. Missing out on the deal has set ESI’s plans back by at least two years.
There are other factors to consider as well. Some industry sources say that the part of the logicbehind moving many large scale investment projects away from Taweelah to sites such as Ruwais and in the Western Region of Abu Dhabi is due to Taweelah’s proximity to Dubai rather than central Abu Dhabi.
It might be that Abu Dhabi sees no point in spending billions of dollars on creating thousands of jobs if the workers are going to live, and spend their wages, in Dubai.