Arabtec's Momentum Continues
The recent award of a large contract to Arabtec in Kazakhstan confirms that the company is rising again after having suffered severely from the 2009 financial crisis. This project - which joins a series of other recently won contracts - makes for a promising medium-term outlook for Arabtec and confirms that the company's strategy to diversify its market of operations away from Dubai has served them well ( see 'Arabtec Continues To Diversify, 6 Jun). This project is also good news for Kazakhstan as it contributes to the country's ambitious construction growth plans.
|Kazakhstan Slow Growth|
|Construction Industry, Real Growth, % y-o-y|
The US$1.4bn contract in Kazakhstan has been awarded by Aldar Properties, the largest real estate developer in Abu Dhabi. The project will be named Abu Dhabi Plaza and it is a mixed-use development of 500.000 square meters in the capital Astana. It includes five towers - one of which is 320 meters high -, luxury residential apartments, office space, a five-star hotel, a retail podium and four basement car parks. The project, awarded to a joint venture company led by Arabtec is expected to be completed in 2017.
This investment responds to the increasing demand for infrastructure in Kazakhstan and is a testament to the growing interest of the UAE in the country. In turn, this is a significant opportunity for Arabtec, as described by Hassan Abdullah Ismaik, managing director and chief executive: "this new project brings the total gross value of contracts awarded in 2013 to nearly Dh13bn (US$3.5bn), which is anticipated to have a positive impact on Arabtec's performance over the near to midterm" (reported by Gulf News). In the first quarter of 2013, the company saw profits rise by 20% and its current backlog is valued at US$ 5.72bn.