Interview Sultan Ahmed bin Sulayem, Dubai World

For Dubai Drydocks World, the ongoing international financial crisis is not a problem but an opportunity, said the head of Dubai World – the group that owns the company. In an interview with Emirates Business, Sultan Ahmed bin Sulayem, Chairman of Dubai World, said it is important to know when and where to invest to take maximum advantage of a crisis such as the present one. He said Drydocks World’s investments in South East Asia are a well-considered move that seeks to benefit from the region’s shortage of shipbuilding and maintenance facilities. More than half of the company’s revenues last year came from that region, he added. The company is bullish about the Asian market as a whole and is in talks to acquire a Chinese maritime company – a first step towards a firmer foothold in the region. The firm does face a few challenges, though, he said. The biggest is recruiting and retaining suitable manpower, while getting UAE nationals to move abroad remains another one. How has the global financial crisis affected your business? It has not affected our businesses at all. We are still getting more and more contracts on a regular basis. How important are your investments in South East Asia? South East Asia, especially Singapore, is a very important place in terms of the size and numbers of vessels operating there. This area is also short of maintenance facilities. Therefore, it was a strategic decision to invest there in both building and maintenance of ships. How has your performance in the South East Asian region been so far? Last year, we made $1.5 billion [Dh5.51bn] in revenues from this area, plus another $1bn from Dubai dry docks. What about competition in this sector? And how are you facing it? Currently, there are dry docks in Dubai, Oman and Qatar. These are all competing to serve in the Arabian Gulf area. So we are in competition with the existing companies on their own turf. The main reason for us to move into and invest in this part of the world [South East Asia] is because of our customers, who were impressed with our services in Dubai and asked us to come to serve them on or near their home bases. Has the global financial crisis impacted on your business in South East Asia? It has not affected us, as our dry docks in Singapore and Indonesia are fully booked for the next two years. We are also investing in China so that we can take more contracts. Is this the right time to buy assets? And where? Yes it is. And currently we are looking to invest in China, India, Vietnam, Thailand and Latin America. The first investment, for which we are still negotiating, will be in China through a 60 per cent stake in the company Top Niche. Then, we are going to invest in other companies as and when there is an opportunity. How would you assess the Chinese market? It is not an easy one. To enter this market, we have to plan well. We are entering the Chinese market through a $50 million investment in the company that already has a major presence in China – Top Niche. What is more important to you, the building or maintenance of vessels? Revenues from maintenance services is much more than from building new vessels. In this area, 70 per cent of the vessels are more than 20 years old, and therefore many of them need very specialised maintenance services in order to get insurance cover and be able to sail. As far as building new ships is concerned, there is a huge demand for vessels, which is rising due to the increase in global trade volumes. Vessels are important to transport goods from one place to another and so ship building activities will go on increasing. But, as I said, maintenance, especially in this part of the world, will always be slightly more lucrative. What are the major challenges that you are facing? The biggest challenge is to be able to recruit and retain qualified staff, especially UAE nationals. The majority of our staff in our locations abroad are not UAE nationals. It is difficult to get them to relocate, as they don’t want to live and work abroad. Currently, we have a number of programmes to attract more UAE nationals, especially engineers, to work abroad. What made you go abroad? We are keen to diversify our income. We don’t want to limit ourselves to Dubai only as a source of income. This will also help us in facing the global financial crisis. The other important reason is that our customers, whom we serve in Dubai, were impressed with our services and they have asked us to set up base in South East Asia to serve them better and save them the effort of travelling to Dubai to get maintenance services. We have also developed oil rig-building facilities, and these have a healthy demand. And what about your recent projects in Dubai? We are expecting an increase in profits of Drydocks World, especially in our operations in the Dubai dry dock and Dubai Maritime City. In Dubai, we have developed the luxury yachting sector with facilities that were earlier available only in Europe. How important is the Asian market to Dubai Drydocks World? Asia today is the most important area. Most dry docks in Asia have closed due to the increase in the cost of living and problems with labour unions. There is a huge latent demand and we are investing in this area to cater to it. What was the reason behind your setting up a training school on Battam island in Indonesia? The purpose is to train the workers there and improve their professional as well as living standards. Our idea is not to exploit these workers but to give something back to them and their community. Sultan Ahmed bin Sulayem: Chairman of Dubai World Sultan Ahmed bin Sulayem is the chairman of Dubai World – the Dubai-owned company that controls about 100 businesses. The 52-year-old oversees all of Dubai World’s activities, which include property, retail, private equity, financial services and maritime services. He started his career in Dubai as a customs official and has served as the head of Jebel Ali Free Zone. He also chairs property major Nakheel and has set up Istithmar, a private equity fund with investments in financial services, tourism and healthcare businesses in the United States, Europe and Asia. Sultan Ahmed bin Sulayem was educated at Temple University in Pennsylvania, and has been described as one of the key individuals who manoeuvered Dubai away from a country that had merely struck oil in the 1970s to a shipping, property and tourist nation. By Muna Ahmad