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Dubai's Danube plans to launch IPO.

D anube Building Materials, the UAE- based building materials company, plans to launch an initial public offering (IPO) in the UAE or Saudi Arabia in the next ive years. The decision of the com- pany, which is a leader in construction, building materials and shop fitting indus- tries, to go public is driven by the signifi- cant growth it has witnessed in the re- cent years, which peaked in 2009 when it secured a total of one billion dirhams in annual turnover despite the challenges presented by the financial crisis. With a view to hit 2.5 billion to 3 billion dirhams in the next three to four years as the market fully recovers and prices normal- ize, the company revealed that it is also open to dual listing in both countries. "I want to make Danube a billion dollar company then we will go public and with an annual growth rate of 30-40% this tar- get will not be too far," Danube Building Materials Chairman Rizwan Sajan said. With nine 'Danube Buildmart' stores currently in operation, the company has earmarked Dh200 million towards the expansion of its retail brand to a total of 16 branches by year end. The company is also looking into expanding further into other Gulf construction hotspots includ- ing Abu Dhabi in the UAE, Saudi Arabia, Bahrain, Oman in addition to India. "It took a lot of courage to open nine stores last year in the midst of what was the worst situation for everyone in the construction sector. However, the expansion we have seen during this pe- riod further strengthened our position in the market and is encouraging us to ac- cess public equity markets in the UAE and Saudi markets," Sajan said. "This year, we are targeting to secure 30 to 40% growth, and we are con ident of the prospects given the region's steady movement towards recovery," he said. Danube Building Materials started as a building materials supplier, but has since diversi ied into a one-stop shop concept called 'Danube Buildmart' last year. Today, there are a total of 20 global Danube retail facilities - 15 in the UAE, two in Oman, one each in Bahrain, Saudi Arabia and India, in addition to procure- ment offices in China and Canada. The company has also invested Dh50 million in a new 1.3 million square feet manu- facturing facility in TechnoPark, which will be functional by early 2011.

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Publication:Saudi Economic Survey
Date:May 27, 2010
Words:418
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