Booming construction sector sends UAE elevator market to top floor

Dubai: High growth in the construction sector is seen lifting demand for elevators and escalators by 30 per cent in the UAE this year, a key industry player said.

The demand will rise from 2,800 units sold last year to 3,600 units in 2006.

"If oil prices remain high, we will continue to see investment in the construction sector in the region. Ninety per cent of the construction growth is in the multi-storey building segment and this increases demand for elevators," said Hameed Salahuddin, executive director of ETA Melco, a joint-venture between Japan's Mitsubishi Electric and Dubai-based diversified business group ETA.

He said the company hopes to maintain its 50 per cent share in the UAE market.

Last year it sold 1,400 units and has a target of 1,800 units this year in Dubai and Abu Dhabi. Demand in the high-rise building segment is estimated to be about 400 units. ETA Melco supplies elevators in 14 countries, including India, Turkey and Central Asian states. Last year it recorded a sales turnover of Dh580 million.

Although buildings are mushrooming in Dubai at a breakneck speed, the elevator market is tiny in comparison with high-growth regions such as China and India.

The Indian elevator and escalator market growth is fuelled by new multi-storey residential building complexes and a boom in the construction of shopping centres in major cities. The country's construction sector is expected to grow 20 per cent per year.

According to Mitsubishi Electric's building systems group vice-president Shinichi Ito, China needs 120,000 units this year, one-third of the total global demand. With its construction industry recording a growth of 20 per cent, India will need 15,000 units this year. ETA Melco hopes to supply 1,100 units in the Indian market this year compared to 950 units last year.

Ito said Mitsubishi recently shelved plans to set up a factory in India after a feasibility study conducted by the company showed that returns on investment were not sizable.