Dubai: Dubai-based building materials supplier Danube Building Materials said, it is looking at an initial public offering (IPO) listing in Saudi Arabia or the UAE within the next 5 years.
“The company’s decision to go public is driven by the significant growth it has witnessed in the recent years, which peaked in 2009 when it secured a total of Dh1 billion in annual turnover despite the challenges presented by the financial crisis. With a view to hit Dh2.5 to Dh3 billion in the next three to four years as the market fully recovers and prices normalize, the company revealed that it is also open to dual listing in both countries,” the company said in a statement.
With nine Danube Buildmart stores currently in operation, the company has earmarked Dh200 million towards the expansion of its flagship retail brand to a total of 16 branches by 2010.
The company is also looking into expanding further into other GCC construction hotspots, including Abu Dhabi in the UAE, Saudi Arabia, Bahrain, Oman and India, where many projects in the pipeline pose significant potential for growth. Globally, Danube has been witnessing steady business in China, which serves other growing markets such as Europe and Africa.
The company was established by Rizwan Sajan, a non-resident Indian in 1993 which went on to become one of the largest suppliers of building materials in the region, primarily cashing in on the construction and real estate boom.
“It took a lot of courage to open nine stores last year in the midst of what was the worst situation for everyone in the construction sector. However, the expansion we have seen during this period further strengthened our position in the market and is encouraging us to float the company to access public equity markets in the UAE and Saudi markets,” said Rizwan Sajan, Chairman, Danube Building Materials.
“This year, we are targeting to secure 30 to 40 per cent growth, and we are confident of the prospects given the region’s steady movement towards recovery.”
Danube Building Materials started as a building materials supplier, but has since diversified into a one-stop shop concept called Danube Buildmart last year.
Today, there are a total of 20 global Danube retail facilities - 15 in the UAE, two in Oman, one each in Bahrain, Saudi Arabia and India, in addition to procurement offices in China and Canada.
The company has also invested Dh50 million in a new 1.3 million square feet manufacturing facility in TechnoPark, which will be functional by early 2011.
“Spreading risk has helped us weather the downturn and now that the payments situation in the market seems to be improving, we are planning to expand into India within the next two years, as we believe that it is a market with a huge demand for building materials. We are currently looking at Mumbai for our initial foray into this massive, potential-laden market,” concluded Sajan.
