How has recent political unrest in the region affected company operations?

SHAW: As a UAE based company our core markets are the GCC. Political unrest in the region was clearly a concern, but the reality is that it has not really affected our operation much. There has been a slowdown in some of the projects as people may be taking a wait-and-see approach, but the reality is that most projects in Qatar, Saudi Arabia, and the UAE are still carrying on. Bahrain has been more affected, but it is not as large a market as the others. Going further afield into North Africa, our export plans have slowed down. We see this as a postponement of an opportunity rather than anything that will stop our plans. Development will happen both in this region and in North Africa. Our target markets are the GCC, North Africa, India, and the rest of Africa. These markets are where the development will be. Where there is development, there is infrastructure spending and real estate projects, and that is where cable is needed. Our expansion plans are across all of these regions. We have been looking into plans in North Africa, and for the moment, those are on hold until things settle down.

What are your biggest export markets?

SHAW: At the moment our biggest export markets are around the GCC. We have two businesses; we have the cable business and we also have a copper rod and wire business. As a group our biggest single market is Saudi Arabia followed by India for our copper products and Saudi and the other GCC countries are the biggest markets for our cable business. Looking ahead, we see opportunities in Africa, North Africa, India, as well as further opportunity in the GCC. Perhaps the largest virgin opportunities are in sub-Saharan Africa. There is a great realization at the moment that Africa is going to boom and Dubai and the UAE are well placed to capitalize on those opportunities. The air links are excellent and the port links are excellent. African businesses see the UAE as a natural place to come and buy products or source products.

How do volatile commodity markets impact your business?

SHAW: As a business taking copper, and to an extent aluminum, and turning it into wire and cable, the volatility of these commodity markets has a huge impact on a business like ours and of course on our customers. The cable company and most users of copper have to pass on the price changes in copper to their customers. Our customers are seeing this volatility as much as we are because unfortunately, we have to pass these price rises along. However, if the price of copper goes down, we also pass on these changes. Volatility makes our business more difficult to manage. The high prices increase our working capital requirements. The volatility is what makes it really difficult and it makes it difficult for our customers. If they are bidding on a fixed price project, they have to take a view of what copper prices and therefore what cable prices will be 6 months or 12 months down the line. So the volatility adds an element of uncertainty to their business.

Do increased regional smelting facilities have any impact on your business?

SHAW: Investment in aluminum and aluminum smelting in the region must be the most significant in the world for aluminum smelting capacity. From our point of view it’s very good. It puts sources of aluminum rod, which is our raw material, much closer to us. We are predominantly at the moment a copper business and would be delighted if there was a copper smelting or refining capacity brought into the region. We source cathode, more than 100,000 tons a year from around the world, from parts of Africa, to India, to South America. Where aluminum smelting is an added value to industry here and taking advantage of the location here, copper smelting could be the same. We would be delighted if we had a closer to home source of copper cathode. Looking at the basics, the location, the ports, the availability of energy, and the availability of local demand because the Middle East is increasingly becoming a large copper user, there is real opportunity. We are also in very close proximity to India, which is going to be a very large user of copper as the Indian economy develops. But we will leave that to the smelting experts.

How significant will the Etihad Rail project be in terms of new business for local industry?

SHAW: Etihad Rail for us is interesting from two aspects. We are a very large user of road freight. Fortunately, all of our plants are located very near to the port, so incoming freight will remain truck based. But, we are exporting tens of thousands of tons into the rest of the GCC, both copper and cable. As the GCC rail network comes online, we will be able to put a lot more freight onto rail instead of trucks. This will reduce our costs and will be a general improvement. From a very company specific point of view, we see this as an opportunity to grow into a more specialized industry sector, which up to now, we have not had the opportunity to develop. We are very much looking forward to developing an industrial capability to service the rail industry. This then gives us product that we can then take further afield. As other countries then develop their railways, we will have a product field that we can then offer to new export markets.

In what ways does infrastructure development support industry in the UAE?

SHAW: Infrastructure development in the UAE is quite fundamental to us because we are part of the infrastructure. Infrastructure development is not just the roads and railways; it is also the power element. That feeds directly to us as we are part of that power infrastructure. Infrastructure development is very core to our business. As cities like Dubai and Abu Dhabi expand, they want to bury more of their electrical transmission infrastructure, and instead of importing cable, we are now building a factory that will be able to supply those products locally.