قصة حياة رياض كمال رئيس مجلس ادارة ارابتيك…وتعليقه على صفقة ميدان..!!!

By Robin Wigglesworth in Abu Dhabi
Published: January 15 2009 19:06 | Last updated: January 15 2009 19:06

When Riad Kamal, a Palestinian engineer, arrived in Dubai in 1974 the first project he worked on was the Pearl Building, a 17-storey tower that was then the tallest building in the commercially minded but still unknown trading hub.

More than three decades later, Arabtec, the company that Mr Kamal founded and has nurtured into one of the leading construction businesses in the United Arab Emirates, is due to complete the Burj Dubai, the world’s tallest building. In the first nine months of last year, Arabtec’s profits more than doubled to Dh761m ($207.3m) compared with the same period the previous year.

However, the completion of the Burj Dubai will come at one of the most trying periods not just for the UAE, but also for Dubai and Mr Kamal’s construction company. The credit crunch has undermined the previously booming property market and caused developers to cancel several projects and review all future plans.

“I’ve lived here 35 years now, and I’ve seen ups and downs – but nothing like this,” says Mr Kamal. “What has been achieved in recent years has been tremendous, but we now face a slowdown and a correction.”

According to a Colliers International report released this week, house prices in Dubai dropped 8 per cent in the fourth quarter. Many analysts expect to see steeper declines in 2009.

“At the moment demand is absolutely stagnant,” admits Mr Kamal. “One of the big questions for the developers will be whether people that have committed to buying places will meet their commitments, as the market has been dominated by speculators.”

Banks are scrambling to limit their exposure to anything related to real estate, tightening mortgage conditions and limiting financing to even the largest developers. Investors are no more optimistic, and are shunning property-related stocks, including Arabtec. The company, which employs more than 52,000 people, lost more than half its market value on the Dubai Financial Market last year.

The cancellation last week of a $1.3bn contract by Meydan, a Dubai government company, to build a horse racetrack in Dubai with Malaysia’s WCT – ostensibly due to delays – was therefore bad timing for Arabtec, and sent the stock further down.

Mr Kamal declines to comment on the cancellation, but stresses that even if, in the worst-case scenario, half of the company’s Dh42.2bn order backlog was aborted, its workers would still be busy this year and next.

Analysts at Shuaa Capital, a local investment bank, agree that while the cancellation could “erase Arabtec’s hopes for earnings growth”, the company remains in a good position to withstand rising project delays and terminations. Even if every Dubai contract were to be cancelled the stock would still be undervalued, the bank notes.

Sean Gardiner, head of research at Morgan Stanley in Dubai, says Arabtec is one of the bank’s favoured equity picks in the Gulf for 2009. While stressing that the Meydan cancellation “increases the risk factor” surrounding Arabtec’s order book, the company should benefit from increased infrastructure spending across the Gulf, says Mr Gardiner.

Mr Kamal expects at least half of Arabtec’s projects to move ahead on schedule, while a quarter could be put on hold and the rest still progress – but more slowly than expected.

However, to counter a slowdown in Dubai, Arabtec will “spread its wings”, says Mr Kamal. “Going forward we will concentrate more on markets such as Abu Dhabi, Doha and Saudi Arabia.”

Still, Mr Kamal warns against discounting Dubai’s rapid recovery from its travails. In the 1970s, the emirate completed the construction of the Jebel Ali port a few miles outside the city.

“People said it would be a disaster and for four year years it was inactive, but look at it now,” he says.

Copyright The Financial Times Limited 2009