Cement makers see huge opportunity in UAE nuclear plants

Cement and ready-mix companies in the UAE are gearing up for a massive opportunity for supplying cement and concrete for nuclear power plants in the UAE.

The UAE is expected to award contracts estimated to be worth $40 billion (Dh147bn) to build several nuclear reactors.

According to a senior industry official, the contract for nuclear power plants would be a blessing for cement companies already struggling with falling demand and reduced profits.

"We are talking of a massive potential here ahead of us. Constructing a nuclear power plant requires a lot of special grade ready-mix and companies are already gearing up towards it," said a senior official of a UAE-based ready-mix company, who did not want to be identified.

"We on our part have already made initial enquiries about the technological improvement that needs to be carried out to cater to the forthcoming demand. We are closely monitoring the progress of negotiations and tenders. The next step can be taken after the contract is awarded," said the official.

The negotiations have reached the final stage and contracts are expected to be awarded soon.

The UAE recently set up the Emirates Nuclear Energy Corporation (Enec) to spearhead the country's nuclear energy programme.

A recent announcement said that Enec is in the advanced stages of assessing several potential sites across the country.

Enec Chief Executive Mohamed Al Hammadi expressed confidence that the nuclear power plants could begin producing electricity in 2017. Negotiations are currently under way with teams of contractors bidding to design, build and help operate the proposed plants. Actual construction is expected to start in 2012.

"We are at the end of the cycle. The contractors will first approach the ready-mix companies who thereafter will contact us," said Mustafa Gorgunel, General Manager at Union Cement Norcem.

According to him the cement industry is badly in need of such an opportunity. "The production levels and demand for cement has reduced during the past two quarters. The situation will continue to remain the same until 2011. I was even told that we should expect signs of growth only from 2012."

"At UCC, we are equipped to produce all types of cement that is used in the construction sector. Moreover, the industry is quite flexible. We will be able to easily change the production type," he added.

Cement makes up 15 per cent of high-density concrete, used in construction of nuclear power plants.

Michael Richardson General manager at RAK Cement also said that the new opportunity would be a tremendous boost for the industry.

"We have not started planning about the demand or supply to power plants. Once the contractor is selected the other aspects would become clear," he said.


Multinational firms lobby for UAE nuclear deal

Lobbying has already begun by major contractors for the nuclear power plant project.

According to a Reuters report South Korean President Lee Myung-bak is visiting the UAE in a push to win one of the world's biggest nuclear power plant contracts.

The contracts estimated to be worth $40 billion (Dh147bn) to build several nuclear reactors is expected to be awarded "possibly early next week", industry sources told the news agency.

A South Korean consortium of Korea Electric Power Corporation, Hyundai Engineering and Construction, Samsung C&T, and Doosan Heavy Industries is in the running to win the largest-ever energy deal of the Middle East.

Other bidders include a consortium of General Electric and Westinghouse Electric, a subsidiary of Toshiba Corporation, and a French consortium led by EDF and GDF Suez and including Areva and oil group Total.

The French consortium was initially seen as a front-runner for the deal but it recently appeared to be losing ground to the South Korean firms.

On the Korea Exchange earlier this week, shares of Korea Power Engineering and Doosan Heavy Industries rallied on expectations for the deal, analysts said.

IBK Securities analyst Yoon Jin-il said the contract is expected to be split in three stages with the initial order to be worth about $5bn, but the first-phase winner is likely to take home the remaining two.

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