Industry players hopeful of a recovery

The United Arab Emirates and the Gulf region in general have seen unprecedented growth and development in recent years, mainly due to surplus funds owed to their oil-rich economies. The rapid economic development transformed the desert-raged region to a regional hub of tourism, hospitality and entertainment. This development paved way for the construction and infrastructure industry, with investors all over the world willing to offer their dime.

The construction and infrastructure growth fostered many other peripheral industries in the process; steel and metalworking being a prominent one. UAE witnessed strong metalworking and fabrication growth over the past few years due to growing construction and infrastructure activities, relatively cheap energy sources, economic elevation and the booming real estate sector.

The past 18 months have been a tester for many, with industries going through a recessive phase. The demand for steel waned too but with recovery in sight and consumer confidence gradually returning to the region, the demand for steel is expected to rebound. The consumption for the steel industry is expected to reach around 11 million metric tonnes by the end of 2013.

The worst is over

The impact of the economic downturn struck a huge blow to various segments of the industry. Manufacturing and sales output dwindled 30 to 40 percent.

"Recovering from the recent economic depression has been a relatively very slow process. Industrial growth has marginally recovered in 2010 and is expected to grow. However, there are significant differences in the pace and nature of the recovery due to low consumer confidence and reduced spending. We however can confidently say that the worst is almost over and we are almost through with the bottom crest of the depression and can only expect the industry to recover and start growing. We expect the recovery to be gradual and more consistent and hence are looking at business prospects positively," said Shobha Mendonca, Managing Director, Middle East Factory LLC.


Middle East Factory offers complete engineering solutions in the field of structural fabrication; from design to installation, inclusive of post installation services. It also specialises in engineering non-structural steel works like platforms, meszanine floors, steel staircases, hand railing, moulds for in-situ and pre-cast concrete, entrance canopies, scaffolding accessories and fabrication of mild steel with hot dip galvanised finish.

Mendonca expects business to have a reasonably strong year in 2011. "Though our bidding activity has improved significantly from about a year ago, we are still facing stiff competition. We expect profits to be weak in the first half of the year but gaining momentum as the year progresses. Supply capacity still exceeds demand and keen competition is keeping pressure on prices and margins."

Recovery in sight

Ben Jones, Commercial Manager at Brown McFarlane International is also hopeful of a rebound in the market as heavy equipment manufacturers expect considerable sales resurgence across the country. "The recession of last two years affected steel due to the resultant finance restrictions on projects, and also due to the price volatility in the steel markets. Now that steel prices have stabilised somewhat, and increased investment is being seen in capital infrastructure projects, many of our clients are seeing increased activity and expect new business in early 2011."

Brown McFarlane International is a carbon steel plate stockist and distributor based in Jebel Ali, Dubai, specialising in high-quality steel plates. It currently stocks pressure vessel, HIC Premium and Ballistics steel plates, in addition to high strength structural steel plates demanded by fabricators for offshore industMężczyźni