After reporting strong first-half results, Senaat – the industrial holiday company of the Abu Dhabi government – plans to further invest in the UAE’s industrial sector. On July 31, Senaat posted a 20% year-on-year rise in net profit to Dh453 million. The earnings before taxes, interest, depreciation and amortization surpassed Dh1 billion for the first time.
The company plans to reinvest these profits to continue developing its portfolio companies and form new projects. Senaat’s entire portfolio totals Dh26.8 billion, including investments of over Dh18bn during the past decade.
The company has full or partial ownership in six businesses – National Petroleum Construction Company, Emirates Steel, Arkan Building Materials, Al Foah, Agthia and Ducab – and is developing two companies, Al Gharbia Pipe Company and Taweelah Aluminium Extrusion Company.
In March, Senaat said it would invest Dh5bn in the country’s industrial sector over the next two years. According to Senaat Chairman Hussain al Nowais, Senaat will continue to fund its investments using its profits and the prudent use of debt. Al Nowais said Senaat has several investment plans and strategic projects being developed that will help with the diversification of Abu Dhabi’s industrial base and increase the prominence of the non-oil industry sector in the country’s GDP.
Oil and gas contribute to 30% of the UAE’s economy, and the country is working toward diversifying its economy from oil and gas. In terms of its GDP contribution, the county’s industrial sector is half the size of gas and oil. The UAE government expects to grow the size of its industrial sector over the next five years by five percentage points.
In April, Ministry of Economy Undersecretary Abdullah Al Saleh said the UAE hopes to reduce the oil and gas sector’s contribution to the GDP by diversifying and developing other important and increasing their contribution to the GDP, including the services sector and industrial sector.
Senaat General Holding Corporation, an Abu Dhabi government owned industrial group, recently announced that its revenues for the first half of 2015 are Dh6.8b – a 2.5% increase from the same time period in 2014. Senaat is a top contributor to Abu Dhabi’s Economic Vision 2030, which strives to diversify economic sectors in the emirate and reduce reliance on hydrocarbon exports as a major source of income. It manages more than Dh26.8 billion of industrial assets and employs more than 19,500 people.
This is a 20% rise in net profit for the first half of this year. Senaat General Holding Corporation reached Dh453 million in the first half of 2015 and earnings before interest, tax, and depreciation surpassed Dh1 billion, up 18% from the same period in 2014. The company’s chairman, Hussain Jasim Al Nowait stated that the group as a variety of investment plans and strategic projects in the works which will further the diversification of Abu Dhabi’s industrial base. These plans will also increase the contribution of the non-oil industrial sector in the emirate’s gross domestic product.
“Senaat will continue to seed its own investments through using its own profits and through a prudent approach to debt which is supported by the confidence of financial institutions in the company’s ability to fulfil its future obligations,” said Hussain Jasim Al Nowait.
He continued, “All success factors are available for Senaat to continue to grow and perform well. It has the financial strength, qualified and competent Emirati management team and a clear investment vision. I am confident that Senaat will continue to successfully deliver on the government’s vision and contribute to its diversification efforts.”
Senaat continues to re-invest profits to further develop existing companies and launch new projects. Emirates Steel (ES), National Petroleum Construction Company (Npcc), Arkan Building Materials Co, Agthia, Al Foah and Ducab, are all members of the industrial groups portfolio. Taweelah Aluminium Extrusion Company (Talex) and Al Gharbia Pipe Company are also under development.
A new, long-term strategy has been initiated in the United Arab Emirates that is set to boost the success rate of small and medium enterprises by 50%. The plan is aimed to reduce the country’s dependence on oil revenue and the federal entity responsible for the initiative has been endorsed by the UAE Cabinet. Currently, small and medium enterprises (SMEs) have a success rate that is just around 25% to 30% and the Managing Director of National Bank of Abu Dhabi Securities anticipates the program will boost that rate up to 50%.
The initiative is called The National Program for Small and Medium Enterprises which is the first time a federal entity has establish this type of body in support for the SME sector. However, it’s not the only organization that has placed valuable resources into the growing sector as Hussain al Nowais, chairman of the Khalifa Fund for Enterprise Development, has established similar initiatives with investments for the SME sector.
The federal program is housed under the order of the Ministry of Economy and sets the focus to develop a strategic blueprint which will provide technical support, expertise and training to bolster SMEs throughout the region. Additionally, the program will work with local and federal governments as well as the private sector to fuel products inside the UAE and beyond. This type of diversifying strategy will help decrease the dependence of oil revenues as the global market for oil demands change. On top of that, it works as a way for Emiratis to use the opportunity to start their own businesses, utilizing entrepreneurship skills instead of waiting for a government job opening.
As it currently stands, the UAE has approximately 300,000 SMEs that represent roughly 92% of all businesses and contribute about 86% of all jobs in the UAE market. With that being said, SMEs account for 60% of the country’s GDP and that number is expected to rise by 2021 to 70%, to meet the requirement set in place by The National Agenda. Due to the expertise Hussain al Nowais has developed and put in action during his own ventures that stimulate SMEs in the UAE, he has welcomed the plan of assisting with the start of The National Program for Small and Medium Enterprises as is will effectively and efficiently contribute to the country’s economy.
The initiative can help the UAE strengthen the SEM sector which will build up competitiveness in the national and global markets. As the holding company Khalifa Fund shares its’ expertise with the local and federal bodies, the SME initiative is predicted to meet the needs of the UAE.
Egypt is home to more than 89 million people which makes it the 15th most populated country in the world but did you know 60% of the population lives below the poverty line? This means that millions of its citizens are struggling to make ends meet and the Egyptian government is seeking ways to turn that around. But that also means there needs to be a change in the economic climate as a whole where industries need enhancement and development. With that being said, nearby countries are lending a helping hand by supplementing their economy with a vast number of investments.
Ever since the unseating of the Muslim Brotherhood government in 2013, new waves of economic opportunity have been knocking on the door where expansion and construction has begun to reshape the financial status of country as a whole. Specifically, the United Arab Emirates has come to the aid of the other Arab nation in the time of change with investments that are sparking a financial turn-around.
One of the many investments coming from Abu Dhabi, is worth millions of dollars which is the coal-fired plant from Al Nowais Investments. The coal-fired plant is set to be 70% funded by the investment firm, according to chairman Hussain Al Nowais, where job openings will help reduce the amount of citizens that are unemployed. Another coal-fired plant was signed with a memorandum of understanding between the Egyptian government and two companies: Abu Dhabi’s International Petroleum Investment Company and Cario-based Orascom Construction Industries, respectively.
These investments are geared to present a number of financing prospects for Egypt’s commercial banking sector that’ll reverse the low loan-to-deposit ratio they currently are subjected to. It’ll give the banks the chance to capitalize on interest-based lending to strengthen the sector in general. Additionally, investment banking will see some benefits as well because there will be work needed for the arrangement of bonds and other financing aspects. If the investments thrive in Egypt, the banking sector could expand 10% to 15% just with project financing.
Investment firms from the UAE have been making positive economic strides in their own country that is billowing out to international investments. Khalifa Fund for Enterprise Development has already begun to pave the way for Emirati innovators throughout the UAE by planning an entrepreneurial program that would help Emirati’s develop their ideas and bring them to reality. This program is a part of the many initiatives taking place within the UAE to fuel their own economy and with the positive strides, Khalifa Fund for Enterprise Development has its sights on helping other nations prosper.
Chairman of the UAE-based investment firm, Hussain al Nowais, announced the activation of a loan agreement totaling USD $200 million to be invested in developing the microfinance sector in the Arab Republic of Egypt. The Egyptian Ministry of International Cooperation and the Egyptian Social Fund for Development signed the loan agreement with Khalifa Fund.
Hussain al Nowais stated that the agreement represents the leadership of the UAE and how the two countries can enhance their mutual relationship to bring economic and social benefit to Egyptian citizens. The loan agreement is anticipated to produce more than 200,000 job opportunities and enterprises over the next six years. The focus of the loan is to help bolster employment and reduce poverty throughout the country. Additionally, it’s a great way to promote the role of women in business by fueling their entrepreneurial attributes and skills to help contribute to the national economy in the Arab Republic of Egypt.
With that being said, some of the parameters of the loan agreement are allotted to provide 25% of the financing strictly towards female enterprises while the remaining amount will be directly diversely split between men and woman. The loan will be a significant factor in the Egyptian governments’ efforts to improve social welfare, decrease poverty and support Egyptian citizens. According to Hussain al Nowais, the loan will reach tenure in 15 years with a six-year grace period which seems to allow for plenty of time for the Egyptian government to make good use of the funds.
In an effort to improve the energy sector in Egypt, Al-Nowais Investment Groups has signed an agreement with the Egyptian Electricity Holding Company to build a coal-fired power plant. This $4.5 billion agreement will be a first of its’ kind in the Suze region in Egypt and will help position the country as a global leader in the field of renewable energy.
Chairman of UAE-based Al-Nowais Investments Group in Abu Dhabi, Hussain al Nowais, signed the deal to help construct the coal-fired power plant with the chairman of Egyptian Electricity Holding Company, Gabr el-Desouky. The plant is expected to produce 2,460MW of power that will sustain economic development and enhance Egypt’s renewable energy resources. This new plant is a part of the growth of Egypt’s energy sector because another coal-fired power plant is in the works in the Delta governorate of Kafr el-Sheikh. The additional plant was a $1.5 billion deal made by Ahmed al-Hanafy who is the chairman of the Egyptian Electricity Transmission Company.
In addition to the Al-Nowais Investment Groups agreement and the one in the Delta governorate, The Egyptian Ministry of Electricity and Renewable Energy also signed other deals that total $21.2 billion with other international firms. This heightens Egypt’s power output to meet the demands of the nation and put them into the global position of a leader in renewable energy.
The international deal with Al-Nowais Investment Groups is just one of many stemming from Hussain al Nowais and his ventures. The investments are putting the UAE on the map as a global investor into many different sectors as they broaden their economic impact to other industries besides crude oil. The UAE is becoming the focus among other nations for investment agreements and making it the ideal, central location of enhancing economic growth.
The United Arab Emirates may be known for their vast oil reserves but unique and innovative ideas may come to fruition in the near future with a new program aimed at entrepreneurs. The proposed program will focus on the bright ideas that come from Emiratis who want to bring their ideas to life, whether those ideas are products or services. Currently, the UAE doesn’t have a system in place that helps innovators develop their ideas and the Khalifa Fund for Enterprise Development has the plans of starting an incubator program that does just that.
The proposed incubator program would give Emiratis the opportunity to present new ideas and apply them to comprehensive services that can bring them into reality. This support process would take about two years to fully implement into the small and medium enterprises sector which includes two initial phases. Since the UAE is economically reliant on oil, the program can help create other profitable sectors with innovation that can be shared nationally and worldwide. If successful, the head of the Khalifa Fund, Hussain al Nowais, could add the feat to his biography that is already quite impressive.
The first phase of the development of the incubator program would involve the creation of electronic systems that allow users to complete necessary internal duties like following transactions, obtaining approvals, tracking status of the loan and other services. The final phase would be to develop a mobile platform where all benefits can be accessed through a mobile device. But, the government would need to increase the support in the information and communication technology sector in order to handle these electronic duties by boosting data optical fibers and receiving towers.
The Khalifa Fund has already discussed the program with other potential investors and if the plans proceed, the UAE could emerge as one of the most innovated markets. Given the history and success of previous projects funded by Hussain al Nowais, the program would add to his lengthy biography.
When it comes to the global economy, it’s important for world leaders to meet and discuss current financial trends to discover new methods of economic strength. And when you combine The United Arab Emirates with some of the brightest world leaders, you end up creating the annual Global Financial Markets Forum. This two-day economic conference is on its 7th year and was organized by the National Bank of Abu Dhabi. Given the GFMF conference was held in the capital of the UEA, Abu Dhabi, it serves as a central hub between all visitors, making the capital a prime place to conduct economic meetings.
Recently, the UAE has shifted economic focus on small and medium enterprises throughout the country so contributions to the economy can be less reliant on oil. With this being said, new guidelines have been set in place on SMEs to account for at least 70% of contributions by the year 2020. As it stands now, SMEs only contribute about 60% but they are also the largest employers in the private sector and with added focus, they could increase the work force even more. Discussion about retailers and small businesses were among the hot topics during the conference which is why SMEs are changing the economic climate in the UAE.
But the issue in the UAE is the lack of lending opportunities provided by the national banks. SMEs must rely on outside funding that comes from investors like Hussain al Nowais and with an impressive biography and background, it’s no wonder why SMEs prefer his funding. Hussain al Nowais is a part of Khalifa Fund, noted in the biography, which is providing many SMEs in the nation with funding to achieve operational success. The GFMF conference touched on outside investments and noted the benefits of bolstering sectors that can increase the economy.
Some of the international speakers included the UAE Minister of Culture, Youth and Social Development, H.E. Sheikh Nahayan Mabarak Al Nahayan, and Colin Powell of the United States, the previous Secretary of State. Many financial discussions dived into various financial sectors from around the world like energy, banks and family heirs.