Expo 2020 a good stimulus for power demand in Dubai, says expert

Andrew Shaw, managing director at Ducab, talks about the power demand in the region.

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Andrew Shaw, managing director at Ducab.
Andrew Shaw, managing director at Ducab.

Expo 2020 has been very important as a stimulus for keeping the demand in Dubai, said Andrew Shaw, managing director at Ducab. 

Shaw was making his remark at the Middle East Electricity event held in Dubai from 3-5 March 2019. 

On the backdrop of Ducab celebrating a 40 years of growth and business expansion as one of UAE’s cable manufacturers, Shaw said that besides Expo 2020, the award of projects by Abu Dhabi National Oil Company (ADNOC) is also a driver for demand. ADNOC will be investing AED400bn over the next five years in exploration, development and production of oil and gas and petrochemicals projects. He said: “The pace of projects from ADNOC is very encouraging, as is the focus on in-country value. Keeping some of that money in the UAE. In addition, in Saudi Arabia, the fact that finally spending has started, projects are announced, and contracts are being released will take some pressure off the market when demand in Saudi increases.”

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Shaw does admit that the power demand in the region for the last couple of years is a "bit disappointing". He said: "It’s been a difficult 18 months of low demand. I think sitting here in Dubai it can be a bit misleading because there is so much construction at the moment as we lead up to Expo 2020, but as we look around elsewhere in the region, there really hasn’t been much going on. I think all the cable companies and associate electric infrastructure have struggled with low demand."

He said that one of the major challenger is liquidity, adding: "I think the construction sector is strained and everybody is looking for credit. That’s been going on for some years. It’s not new. It’s a fact of life. But it does put tremendous strain on the whole supply chain and for our customers. For us as a cable manufacturer in the GCC, what’s troubling is how our margins have been eroded away because there is so much supply and not much demand. And if we are to reinvest in development then we do need to make some money at some point. As a business, that’s probably our key concern."

While Ducab has achieved significant international growth in recent decades, the company believes that the future of its industrial operations must be centered on promoting research and innovation, talent development, and strengthening the regulatory framework for the cables industry. This will be especially important as the global energy sector transitions to alternative power sources and the UAE moves ahead with its national Energy Strategy 2050.

Shaw said: “During our 40th year of operations, we are reflecting on the continual investments in facilities and people that has brought value to Ducab’s customers and to the national economy of the UAE. The needs of the energy sector have evolved a great deal during this time. At this year’s Middle East Electricity conference, we are thanking our partners for their continued trust and loyalty, while also exploring new partnerships through which we can expand our product range, reach out to a wider geographical network, and build a more empowered and skilled workforce for the future.”

Recent estimates show that the GCC currently holds a pipeline of unawarded construction, transportation and energy projects worth more than $2.5tr, which will be a huge driver for the cabling industry

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