Dubai: Al Shafar General Contracting, one of the UAE's leading contractors, has won a Dh990 million contract to construct the Golden Mile on the Palm Jumeirah, taking its current orderbook to Dh4 billion, said a top company official.
Some 10 projects are in the Dh300-Dh400 million range. Recently it won a 42-storey Citadel commercial tower at Business Bay.
Emad Azmy Gendi, managing director of Al Shafar General Contracting, told Gulf News, that despite prices on raw materials nearly tripling over the last few years the Dubai contracting market is unfazed and poised for even higher growth, predicts the managing partner of one of the largest general contractors in Dubai.
"Steel prices have risen from Dh800 ($218) a ton in 2002 to the current price of Dh2200 ($600) because of strong demand from China and Europe," he said.
Other metals such as copper and aluminium have seen similar price hikes, he said.
Because contractors bid for fixed-price contracts a sudden rise in prices can turn a projected profit into a loss. But the metals price increase has been gradual, allowing Al Shafar to price it into their bids, Gendi said in an interview at his office in the Al Safena Building in Oud Metha. Gendi, who co-founded the company in 1989, said metal prices have nearly stabilised and he even predicts worldwide demand to slacken in the fall, when the pace of new construction slows in colder climates, such as Europe.
At the same time, new projects in Dubai appear to be increasing, leading to robust business for the large contracting firms in Dubai.
Despite speculation that the market for residential units is nearing capacity, interest in tourism, educational and free zone developments appears strong, said Steve Brice, head of Middle East research for Standard Chartered Bank in Dubai.
"Residential real estate I think is nearing saturation, but clearly the size of projects still coming on stream is colossal, with the best recent example of this being the Dh100 billion (Bawadi) resort strip being the best example of this," he said.
Gendi wouldn't reveal his company's revenues but pegged profit margins at five to six per cent per project. Al Shafar currently employs 6,500 labourers and continues to hire more, Gendi said.
Gendi said he hoped to increase profits by upgrading machinery with the most advanced cranes, scaffolding, and hoists that should reduce manpower needs.
On Sunday, the company revealed a new logo with great fanfare at the Al Falak Ballroom at the Burj Al Arab Hotel.
The move comes at a time when Al Shafar is attempting to expand throughout the Gulf and perhaps further afield, according to a company spokesman at the event.
