Al Shirawi signs deal with Spiro

The Al Shirawi Group will expand its manufacturing interests with the commissioning of a round duct plant at Dubai's Ras Al Khor industrial area in early February. Investments on the project are Dh5 million. Round ducts are used for ventilation purposes in buildings.

The group has entered into a licensing arrangement with Sweden's Spiro International, makers of machines for round duct production, for the venture.

Annual capacity will be 4,000 tonnes, but will be increased in step with greater export demand.

Under the terms of the agreement, Spiro, part of the $480 million Lindab Group, does not have any shareholding in the venture. However, this could be revised if found necessary, according to the promoters. Projected revenues are between $5-8 million.

This is Al Shirawi Group's second foray into duct manufacturing - it had commissioned a rectangular duct plant - under the mantle of Leminar Air Conditioning Industries - in 2000.

Capacity there is 5 million square feet, while capital outlay totalled Dh12 million, and the company claims to be the local market leader in the category. In the recent past, the firm has been associated with projects such as Dubai Internet City and Tower No 1.

Round ducts have a 5 per cent market share in the UAE construction market, which is still predominantly oriented towards rectangular ducts.

But the promoters believe that with its lower installation costs and energy utilisation, plus longer life cycles, the market would gradually gear towards round ducts.

Also, on major construction projects, such as the Dubai Convention Centre, international consultants are specifying the use of round ducts.

Another factor that could prove favourable in the long term is the passing of laws in the UAE regarding cleaning inspection of ducts, according to a senior official at Spiro.

Similar laws have already been passed in Western Europe and the U.S. during the last decade.

This is only the second round duct manufacturing facility in the UAE - the Swedish multinational ABB was the first to set up one. Saudi Arabia has got three.

"Initially, we are focussing on the new projects that are coming up in the UAE. Our interest in the replacement market will come later on. We will also look at other Gulf markets, and Oman and Qatar seem interesting," said Navin Valrani, executive director at Oasis Investment Co, part of Al Shirawi Group.

The group also has interests in the manufacture of plastic fittings and wire meshes, steel fabrication, pasta processing and printing.