Dubai: Danube Building Materials has set a target of $1 billion (Dh3.67 billion) in revenues by 2015 and it plans to spend Dh200 million for expansion.
Launched by non-resident Indian businessman Rizwan Sajan in 1993, Danube — a family-owned company — has come a long way to becoming one of the largest suppliers of building materials in the UAE and the region. The company made its mark during the economic boom from 2001-2008 that was primarily driven by real estate and construction.
"For the last six months building material prices have been stable," Rizwan Sajan, chairman of Danube Building Materials, told Gulf News.
"Our major strength is our network. We are present in all the emirates and also in other parts of the GCC, so we are not depending on Dubai completely, but other emirates are doing well. Even in Dubai new projects are being discussed and projects which were on hold have started moving a bit."
Today, the company provides more than 15,000 products. It operates from a 285,000 square foot facility in Jafza North and a 365,000 square foot base in Jafza South, which houses its logistics centre.
"For the next two years we are planning to open 15 branches; our investments will be around Dh200 million plus on opening the new stores," Sajan said.
Strategic locations
Danube has grown into one of the largest building materials companies in the region with 18 branches — 13 in the UAE, two in Oman and one each in Bahrain, Saudi Arabia and India, in addition to procurement offices in China and Canada. Danube has a team of 1,000 people working at strategic locations across the UAE, including Jebel Ali, Deira and Abu Dhabi.
Building materials account for an estimated 40 per cent of the value in the construction industry.
The world's building materials market should reach $706.7 billion by 2015, according to a new report by Global Industry Analysts.
Danube saw a 25 per cent rise in revenues in 2010 in spite of the global economic crisis and projects similar growth in 2011, which will take its revenues to Dh1.6 billion.
Danube has also invested Dh50 million in a new manufacturing facility spread over 1.3 million square feet in Dubai TechnoPark, which will be functional this year.
In addition to securing significant growth, the company has also undertaken major expansion initiatives which have expanded its market reach in the region and India, one of the world's fastest-growing economies.
Danube expanded its retail footprint in 2010 and opened Buildmart showrooms in Dubai, Abu Dhabi, Al Ain, Bahrain and Mumbai. Each of these showrooms entailed investments of Dh10 million to Dh50 million.
"If we look at the percentage it [the contribution of Buildmart] will not be much, we are looking at it right now as two years' investment. We are confident this market will surely bounce back and we will break even," Sajan said.
The company plans to continue with its expansion through 2012, during which it expects to open 15 branches. "The year 2010 was a very positive year for us and we are proud to say we managed impressive growth and expanded at the same time.
"We added 10,000 new products to our portfolio for Buildmart to meet housing needs, and now our total product portfolio is 25,000," Sajan said.
"Further, there were fresh initiatives and major investments, well-thought-out strategies and effective implementation, along with our foremost target to deliver the best to our customers, which together helped us stay strong even in tough market conditions. We are expecting positive growth results to continue in 2011 as well."
Compounded growth
The UAE construction industry is expected to witness a compounded annual growth rate (CAGR) of around 20 per cent from 2010 to 2013, according to the Construction Industry Outlook report by industry intelligence provider RNCOS.
"The bullish projections directed towards the UAE construction sector have drawn our focus further into broadening our presence in the domestic market, as we believe excellent opportunities for growth are in sight for investors, developers and other players in the construction arena," Sajan said.
Danube received three awards last year including the Mohammad Bin Rashid Al Maktoum Business Award and the Dubai Quality Appreciation Programme award.
"Our achievements were recognised. These achievements are the result of combined efforts of all our partners, employees and associates and we are grateful to them for their contributions.
"We are committed to not only our own growth, but also to continue to make a positive contribution to the construction industry as a whole," Sajan added.
He said the company could go public in five years.
"Right now our major focus to establish and take the Buildmart concept brand to a different level the way we built our Danube brand Plus we are already working on a franchise business on our building material segment in the African markets."
