Sunday, August 10, 2008

Tawazun Holding sets its sights on global market

Original Article
Last year, Abu Dhabi announced the creation of yet another major venture to invest in the local and global markets as the emirate is pushing ahead with ambitious programmes to diversify its oil-reliant economy and expand sources of income.

Just a few months after it was launched, Tawazun Holding acquired international arms manufacturer Caracal. With Caracal came control of its German subsidiary Merkel, one of the best-known hunting rifle and shotgun manufacturers in the world.

Tawazun did not stop there. It then teamed up with Al Jaber Trading Establishment, part of Al Jaber Group, to build the country's first munitions factory in a joint venture with Rheinmetall Munitions Systems. This factory will serve the needs of the armed forces in the UAE and other regional states.

Despite the significance of such deals, Tawazun affirms that it is just the beginning. The company will soon break out of the local market to hunt for what could be bigger investment packages in regional and international markets.

Tawazun, part of the Offset Program Bureau (OPB), will focus on non-oil industries, mainly technology and advanced products, with the aim of supporting economic diversification and creating jobs for UAE citizens.

Tawazun is still in its infant stages. But, as Saif Mohammed Al Hajeri, Chief Executive Officer of OPB and Tawazun, puts it: "We have big plans and ideas… we aim to be a very substantial and economically powerful company. I am sure we can achieve this target."

In an interview with Emirates Business, Al Hajeri said Tawazun would complement rather than compete with Mubadala. Regarding its scope of activities, he said the company is conducting a study, to be completed by the end of this year, to identify markets and the size of planned investments.

He also said Tawazun would support the private sector and give priority to bringing technology into the UAE.

"The idea is to bring investments and technology as well as expertise to the UAE and also export this technology and products to external markets."

—Can you give us an idea of the new Tawazun company?

—We established Tawazun almost a year ago. It was created as an industrial investment arm for the Offset Program Bureau. We have already started operations, as we now have the Caracal company, which we acquired recently. We also have the Burkan factory, which is nearing completion and will start operations soon. Through Caracal, we also control Merkel and we have established the Emirates Precision Industries. These are the main highlights of Tawazun. Don't forget, it is only a year old, and it is gaining strength very fast.

—What about its capital? Have you defined the company's capital?

—No. Tawazun is an open company. We don't want to specify a capital because it depends on the investments we have or we plan to make. As I said, it is an open venture that will be looking for the right investment opportunities. Our aim is to create joint investment ventures and partnerships, and also to buy other companies or parts of companies with an emphasis on technology and advanced industries.

—Which sectors and markets will you focus on?

—We will focus on the manufacturing sector. I mean the non-oil industries. As for the markets, we will basically start with the UAE and then expand regionally and internationally because the UAE market is relatively small and we have big plans and ideas. We will concentrate on the UAE but also enter other markets… the idea is to bring investments and technology as well as expertise to the UAE and also export this technology and products to external markets.

—Why didn't you think of setting up just an industry unit of Mubadala instead of creating a new company?

—Mubadala is a different company with different sectors and fields. It covers oil, gas and many other fields. We are focusing on industry. We are not competing with Mubadala but we will be complementing each other. In Mubadala, they have specific mandates but our mandates are different. We will make sure we do not enter the same field or sector and also make sure we have different markets. Even if it happens and we entered similar fields, we will make sure we complement each other and there will be no confusion or contradiction of objectives and functions.

—Which specific industries will you focus on?

—We will give priority to certain industries that will serve our objectives and benefit our country's economy. They include metals, technology, applications and other advanced products. We are not planning for the time being to enter, for example, petrochemicals or real estate, but there is talk now about the aviation sector.

—Are there any plans to admit UAE private investors into Tawazun?

—Basically, we are now in some local companies. For example, in Burkan we have the Al Jaber company with us. So we are encouraging the private sector in the UAE. We will continue to encourage this sector to invest with us.

—What is your main goal?

—Our main target is to promote industrial development in Abu Dhabi in particular and the UAE in general, including export-oriented industries and other products that will contribute to supporting our economy and diversification programmes.

—Have you set any target for the company's assets?

—We are now doing an economic study for Tawazun and it should be ready by the end of this year. That will basically determine what kind of investment, size, sectors, and markets which we will enter. Now Tawazun is still in its first year and it is just the beginning, but I can tell you confidently that we aim to be a very substantial and economically powerful company. I am sure we can achieve this target. The company is still in its infant stages, but it is off to a very strong start… we are moving in the right direction.

—How will Tawazun contribute to the economic development in the UAE?

—Basically we will focus on supporting economic diversification plans and creating jobs for UAE citizens in several fields. We have started to provide training for them so they can get good jobs… we are sending nearly 20 UAE fresh graduates to Germany to study mechanical engineering. We want more and more nationals to work with us and help us in our mission.

—What is your ultimate objective?

—The idea is to set up industries and enter sectors that are not available in the UAE, that are imported from abroad. We want to contribute to achieving self-sufficiency in a variety of sectors. We want, not only to set up this industry here but also to compete with similar industries abroad. This will be our priority along with creating jobs for our people, establishing partnerships with the private sector and sustaining our economy. I know these are big targets, but with patience, time, and good work, we can realise them.

PROFILE: Saif Mohammed, Al Hajeri, CEO of OPB and Tawazun

Al Hajeri joined the Offset Program Bureau in 2000 and worked with the teams developing the small and medium-size enterprises (SMEs) programme and Alfia Investment, an OPB subsidiary mandated to develop new projects through the Offsets Fund.

He is the Chairman of German-based Merkel, owned by Caracal International. He also chairs the board of the Abu Dhabi National Hotels Company.

Saif also serves as board member of the Khalifa SMEs Fund, Yah Satellite Communications Company (Yah Sat), Horizon Flight Academy, Al Waha Capital, Caracal International and Burkan Munitions.

He is a graduate of Lewis & Clark College in the US with a BA in business economics.

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