Emirates Float begins production

The Dh1.5 billion Emirates Float Glass (EFG), a subsidiary of Glass LLC, started production this month, according to a senior official.

Ghassan Mashal, Vice-President, Sales and Marketing, told Emirates Business in an exclusive interview that the project, which is located in Abu Dhabi, is the first of its kind in the region for online-coated glass.

"No one in this region is into online-coating production," he said. "It was always imported from Europe and the US. This is the first for this area, barring India. The biggest investment in glass is the float business. We chose Abu Dhabi since float furnaces need gas of which the emirate has an abundant supply."

The factory consists of two float glass production lines, Mashal added.

"We invested about Dh750 million in Line 1, which has started production and has a capacity of 600 tonnes a day. We have also started building Line 2 with a similar investment of Dh750m and a similar production capacity of 600 tonnes a day. The difference in the second line is that it will use a different technology for coating. It is already under construction and will be commissioned by end-2010. When the second line is complete, our total production will stand at 1,200 tonnes," he said.

Line 1 has "started ribbon pulling successfully this month". Mashal said: "We started shipping a few days ago to our markets. Our facility is one of its kind and has coating online facilities. We can coat two types of glass. The technology is provided by PPG of the US for the float glass and the coating. We already have confirmed orders from the local market in the millions."

The start of production was low-key. "Pulling the ribbon is the success of two years of construction. For 15 years you cannot put it off - that is the age of the furnace," he added.

The UAE market is the "core and home market" for EFGEFG. "The GCC is what we call the preference area and still a core market," he said. "We also plan to spread to the Levant area and the rest of the international markets." India is a big market, he added.

The target market includes the construction industry and the automotive segment (at 20 per cent). "Our sister companies under the Glass Inc umbrella are our customers too and could take up to 25 per cent of our production. Within the automotive industry, we address what is called the after markets. We have a sister firm called the Lumi Group, which does windshields and sidelights for cars."

Additionally, EFGEFG is signing MoUs with its sister companies and with different companies internationally.

"We have signed an MoU with a big distributor in Italy. This will address the market in Italy and a part of Spain as well for the construction segment. We are going further into Africa and other parts of the world," he added.

"There is a big challenge ahead of us. There is still business in the region. There is a problem but the mood of the people is adding to the problem," said Mashal.

"Our strategy was to focus on diversifying the product. It is true that there is less demand than supply. The decision was to avoid going generic. So we decided that EFGEFG will make colours and coat them. That is the strategy. I don't have big quantity in my inventory facing all the generic competition from the market. During the good days, I would not go for colours. With the economic problems and the slowdown in the markets, diversifying is the option."

The other huge problem that the market is facing is dumping from China.

Investors
EFGEFG is under the umbrella of Glass LLC, which is the holding arm under the ownership of Dubai Investments. Dubai Investments has a 56 per cent stake in EFGEFG. Other investors include Al Rostamani Enterprises, Al Fahim, Al Nasser Investments LLC, Capital Glass, Kuwait-based firms Amwai International Investment Company and Boubyan Petrochemicals Company, and Oman-based Suhail Bahwan Group.