Ittihad bets on regional industrial growth as it pivots towards consumer brands

The Abu Dhabi conglomerate is upbeat on another year of strong growth despite geopolitical disruption, underpinned by copper demand linked to AI, electrification, and infrastructure projects

PUBLISHED: Wed 17 Jun 2026, 8:00 AM

By:
Suneeti Ahuja-Kohli

Ittihad International Investment sees a massive transformation for the group in the next half a decade as it prepares to emerge as a local player that competes on the global scale. “It will be very difficult not to know who Ittihad is in five years’ time and what it does,” says Zahi Abu Hamze, Chief Financial Officer.

“The next few years could bring greater visibility,” he adds.

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For now, though, the Abu Dhabi industrial conglomerate remains largely unknown beyond the Gulf’s capital markets community, which is a deliberate posture, explains Abu Hamze, as it benefits a business-to-business operation that has never needed to spend on marketing. This, however, may be about to change.

Ittihad’s 2025 earnings report reflects strong operational momentum with revenue growth of 4.3 per cent. Earnings before interest, taxes, depreciation, and amortisation (EBITDA), which is defined as the measure of operating profitability that investors in capital-intensive businesses watch most closely, has surged 22 per cent, indicating a degree of outperformance that signals something structural rather than merely cyclical.

“The significant improvement in EBITDA is a result of improved margins overall across the group,” says Abu Hamze.

Ittihad organises itself around four core verticals of consumer goods manufacturing, which encompasses paper and tissue; infrastructure and building materials, primarily copper rods, steel rebar, and cement; and business services, covering the operation of sewage networks, waste collection, and city-cleaning contracts for government clients. Business services also include healthcare equipment trading services, which involves managing radiology departments at federal hospitals.

In 2025, infrastructure and building materials delivered a 48 per cent increase in EBITDA year on year, driven by the commodities cycle and volume growth. Business services followed with a 26 per cent increase, benefitting from its non-cyclical, contracted revenue base. Consumer goods managed a modest 3 per cent improvement, dragged by lagging margins in the paper business, a result, explains Abu Hamze, of an unusual one-off event in the pulp market and the global paper supply-demand rebalancing post Liberation Day tariffs.

“The pulp price drop doesn’t typically happen within a month,” he notes, referring to a sharp decline in pulp prices triggered by a sudden adjustment in Chinese demand and planned mill maintenance. The resulting high-cost inventory worked its way through the system, compressing margins that have historically run at 17 to 19 per cent. However, this is being seen as a rare event.

“Pulp is a relatively stable market with low volatility. We don’t see such an event happening in a normalised business environment.” As a precaution, however, the group has shifted pricing risk to suppliers.

The copper conundrum perhaps the most strategically significant aspect of Ittihad’s earnings story lies in the durability of its copper tailwinds. The group has operated at full capacity in copper rods for over a decade. Volume growth is not the variable. What has improved is the margin, and Abu Hamze attributes this partly to a copper upcycling facility commissioned last year that now supplies roughly 20 per cent of raw material from scrap. This has meant a meaningful cost advantage compared with competitors who are dependent entirely on primary copper cathode.

Also, Ittihad has begun expanding into niche copper products targeting the very markets that are reshaping global demand. Demand for the metal has been accelerating across three vectors simultaneously, namely, grid electrification, AI infrastructure buildout, and renewable energy deployment. Ittihad is deliberately positioning in the segment of products absorbed by data centres.

The International Energy Agency’s latest critical minerals outlook places copper on a path where existing and planned mines meet only about 70 per cent of projected 2035 demand, with Wood Mackenzie forecasting a 304,000-tonne refined copper deficit for 2025 alone. S&P Global projects global copper consumption rising from roughly 28 million tonnes in 2025 to more than 42 million tonnes by 2040, driven by transport electrification, renewable energy expansion, and rapid growth in AI-driven digital infrastructure.

“About 80 per cent of copper demand globally comes from rods,” Abu Hamze observes. “The 20 per cent is niche-type products, which are used quite heavily in AI data centres and that’s what we’ve expanded into.”

He is careful to note that Ittihad’s natural hedge insulates margins from commodity price swings, but the tightening supply backdrop has lifted the premiums the group charges clients, a positive factor that, unlike spot prices, flows directly into EBITDA.

Current geopolitical events

If there is a shadow over the 2025 results and 2026 outlook, it lies squarely in the Strait of Hormuz. Abu Hamze is candid about the disruption.

Shipping surcharges and port closures have effectively cut Ittihad off from export markets that depend on seaborne freight. The Indian subcontinent, for instance, for copper, North America and Europe for paper.

“We have lost the North American and European sales,” he notes. The group has responded by doubling down on regional land-based sales, and finds, somewhat ironically, that the same disruption has kept competing imports out of the Gulf.

“Whatever we lost outside, we somehow managed to compensate within the region.”

The inventory position provides a further buffer. “We have enough stock to keep serving our clients beyond the middle of the second half,” says Abu Hamze.

The group has entered 2026 with strong momentum and adequate preparation. The more delicate challenge is procurement timing to ensure the group locks in future raw material costs without getting caught with expensive inventory if shipping conditions shift quickly.

The balance sheet matures

Ittihad’s capital market story has evolved rapidly. In November 2025, the group completed a $550 million five-year senior unsecured sukuk, with the order book oversubscribed more than four times, reaching $2.1 billion, achieving a notably lower coupon and attracting strong international participation, with 65 per cent of allocations made to investors outside the Middle East and North Africa (Mena) region. This followed a debut $350 million sukuk in November 2023, later supplemented by a $100 million tap issue in July 2024. Both Fitch and S&P have upgraded the group’s credit rating, from B+ to BB-, reflecting improved fundamentals and a consistent deleveraging trajectory since 2022.

“The main part of the deleveraging story has already happened,” Abu Hamze says. The high leverage of previous years was largely a function of timing with major expansions in paper and tissue being commissioned during Covid, and delaying the ramp-up.

“The target, he says, is a net leverage ratio of 2.5 times, reachable over the next two years, pending certain transactions on the M&A side,” he adds.

Foray into Saudi Arabia

The most strategically ambitious element of Ittihad’s next chapter is its forward integration into consumer-facing branded goods. A new tissue mill in the Kingdom of Saudi Arabia, which is the largest consumer market in the GCC, is being commissioned now, with first commercial sales expected in June this year. An additional 60,000 tonnes of annual tissue capacity will, Abu Hamze predicts, bring the tissue segment to rough parity with paper in terms of contribution to consumer goods EBITDA.

But capacity is only the starting point. The group’s longer-term ambition is to build a regional consumer brand in a market that, Abu Hamze argues, has no genuine pan-MENA champion in tissue and hygiene products. The competitive landscape is fragmented.

In the UAE, more than 50 tissue converters depend on just three jumbo roll manufacturers.

In Saudi Arabia, the ratio is 230 converters to two manufacturers, which signals a good opportunity for Ittihad, which already has a stronghold in the B2B space. The company’s focus on expanding into the retail business could benefit from cost efficiencies and pricing power.

“We are selling to those converters,” Abu Hamze says of the current model.

The execution risk, he argues, is lower than it appears. Unlike the capital-intensive manufacturing expansions of the past, building a consumer brand is primarily a question of talent and marketing muscle, and the group’s manufacturing cost structure gives any brand it launches a significant inherent advantage.

“The risk of the transition is really in terms of securing the necessary resources — experts whose bread and butter is B-to-C,” he says.

“The opportunity is there to shine, because of the weakness of the others.”

Whether Ittihad can make the leap from industrial supplier to consumer champion will be one of the Gulf’s more interesting corporate experiments to watch.

Company overview and financial highlights

Founded: 2008
HQ: Abu Dhabi, UAE
Employees: 10,800+
Nationalities: 50+
Export markets: 50+ countries
Key geographies: UAE and Saudi Arabia

Capital markets transactions

Transaction size details

Sustainability-linked RCF $450 million closed in February 2025
144A/Reg S Sukuk $550 million priced in November 2025,
7.375 per cent coupon, 5-year
Sukuk oversubscription 4x+ 65 per cent placed with international investors

Group financials (Metric financial year 2025)