Arabtec inks JV with Samsung Engineering
Dubai, April 17, 2013
Arabtec, the contractor part-owned by Abu Dhabi fund Aabar, signed an agreement with Korea's Samsung Engineering to jointly form a new company that will focus on large energy and power-related projects in the region.
The JV company will be called Arabtec-Samsung Engineering, and will be incorporated and headquartered in Abu Dhabi.
The company will engage in the full range of sectors from Hydrocarbon projects (hydrocarbon processing, refining, petrochemicals and fertilisers) to industrial and infrastructure business (power plants, water treatment & environmental, metallurgy and industrial projects).
Arabtec-Samsung Engineering will also establish a new Centre of Excellence in Abu Dhabi in the near future to develop young Emirati engineers, who will have access to both companies’ expertise and resources.
Under the terms of the MoU, the new JV Company will bid exclusively together for mutually agreed and selected work in Mena in the oil & gas, infrastructure and power sectors.
Hasan Abdulla Ismaik, managing director and CEO of Arabtec said: “This JV is the logical next step in the relationship between the two companies. Arabtec-Samsung Engineering will be well-positioned to capitalise on the exciting growth opportunities in oil & gas, power and infrastructure. Samsung Engineering is already the leading EPC contractor in Mena, with their experience and track record of successfully executing large scale projects, Arabtec has the right partner to achieve its strategic goals in EPC.”
Park Ki-Seok, Samsung Engineering’s president and CEO, said: “Samsung Engineering is currently executing major projects in the UAE, worth $9 billion. Through this partnership with Arabtec to form a JV, we hope to expand our presence in Mena.”
Khadem Al Qubaisi, chairman of Arabtec Holding, said: “The joint venture will be a powerful alliance of two market leaders with complementary skills in engineering, procurement and construction. We are currently considering further joint ventures, with world class companies to progress other areas of Arabtec’s growth strategy.”
The Dubai-based builder, which is planning a $1.8 billion capital increase as part of its expansion drive, said the new firm would be 60 percent owned by Arabtec.
Samsung Engineering would own the remaining 40 percent, the two companies said in a joint bourse statement on Wednesday.
Under the terms of the agreement, the new firm will exclusively bid for projects in oil and gas, power and infrastructure segments in the Mena region, in contracts ranging between $3-$10 billion, the statement said.
Arabtec is keen to expand into the oil & gas construction business and is also set to acquire the remaining 40 percent it does not already own in UAE oil and gas construction firm Target Engineering, according to sources familiar with the plan.
Arabtec replaced its chief executive in February as part of the shake-up led by Aabar, which has been tightening its grip on the group. – Reuters & TradeArabia News Service