Dubai Chamber calls for monitoring of imported construction materials

Jose Franco
Filed on December 20, 2007

DUBAI The imports of vital construction materials such as steel, cement and wood needs continuous monitoring and advanced organisation to ensure product and work quality in the sector, which needs improvement in investment opportunities.

These points will help perk up the industry's general business environment for further growth, according to the Dubai Chamber of Commerce and Industry, which points out that prices will increase as the sector continues to import raw materials.

Dubai Chamber's monitor series dedicated to the construction sector also suggests that the aluminium industry move to "economy of scale", or reduce costs through increased production, by embracing new technology.

"Focus should be turned to attracting new modern technologies, developing new and existing smelters and diversifying the assortment into innovative alternatives, such as refined aluminium based finish and semi-finished products," it said in a 40-page report. The UAE, particularly Dubai, must take advantage of the aluminium shortages in both domestic and international markets because it has all the resources to do so. "Focusing on economies of scale will decrease the cost of production and increase the competitiveness of the products," it said.

Dubai produced 0.76 million metric tonnes (mmt) of aluminium in 2005 while it imported over Dh2 billion worth of aluminium and its products and re-exported Dh226 million. The Middle East's aluminium production rose from 1.2 mmt in 2000 to 1.5 mmt in 2005 while global aluminium prices jumped 70 per cent from $1,431 per tonne in 2003 to $2,438 per tonne in August 2006.

The construction sector, which accounted respectively for 13 per cent and 12 per cent of Dubai's gross domestic product and the UAE's GDP last year, will grow significantly with over Dh367.5 billion ($100 billion) in investment by 2010. Its contribution to Dubai's GDP of Dh167.3 billion was Dh21.5 billion.

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