By Simeon Kerr in Dubai www.ft.com
Mohammed Ali Alabbar, chairman of Dubai real estate mammoth Emaar, has adopted a lower profile within the emirate during the past couple of years.
In the aftermath of Dubai’s real estate crash, he was sidelined by a new guard of officials less tainted by association with the emirate’s shift from boom to debt-laden bust.
Mr Alabbar has continued to guide Emaar through the emirate’s travails but, dusting himself off from the rough and tumble of politics, has looked increasingly to Africa.
There, though fortnightly trips to the corners of the continent, he is building a private business that he hopes will place Dubai at the centre of a commodities trading triangle linking resource-rich Africa with the emerging economies of Asia, especially India and China.
Mr Alabbar says the investment has so far been “sizeable” with “a very good return” that could value the business at $10bn in three years.
“We could be the biggest supplier for the Middle East and India. Why shouldn’t there be a Middle Eastern Rio Tinto?” he asks.
“In the Middle East, we have big banks, huge telecoms companies, construction companies, dealerships – where is the mining sector?”
Last month, Mr Alabbar and Syed Mokhtar al-Bukhary, his partner who is also a Malaysian billionaire, signed a $1.6bn deal to develop and run Smelter Asia, a 370m tonnes a year aluminium smelter in Malaysia with Aluminum Corporation of China.
Using the Bakun dam to power the facility in Sarawak state, Smelter Asia plans to expand to 700m tonnes a year as extra power comes available.
The raw materials will be sourced from the other end of Mr Alabbar’s emerging commodities supply chain, a company known as Africa Middle East Resources, which is focused on extractive industries in Africa.
AMER, which is in final talks with Guinea-Conakry to process bauxite into alumina for the smelter, is seeking operational partners from either China, India or the US.
Bringing the Malaysian smelter to fruition has been a decade-long endeavour. A memorandum was first signed in 2002 with Dubai Aluminium, one of Mr Alabbar’s former state roles.
The agreement lapsed and has since been taken up by Chinalco as the Chinese hunt for resources continues.
The pursuit of raw materials has led the world’s emerging economic superpower into Africa, and over the past couple of years, Mr Alabbar has also been focusing on the continent, which many in Dubai regard as the emirate’s new frontier. With good communication links and numerous flights across the continent, Dubai has emerged as a secondary hub for Africans looking eastward, rather than the traditional centres of London and Paris, he says.
“Dubai is the New York for Africans now,” says Mr Alabbar. “I really see that the link between Dubai, UAE and Africa is getting stronger and stronger.”
The interests of AMER, of which Mr Alabbar is non-executive chairman, span the entire continent and a wide range of resources.
As well as gold, bauxite and iron ore in Guinea-Conakry and oil and gas concessions in Uganda, AMER is in advanced discussions on uranium and hydrocarbon interests in Niger, gold and coal deposits in Madagascar, phosphate concessions in Mauritania, copper in the Democratic Republic of Congo and oil and gas in Gabon.
The business has about 20 people and is growing fast, with offices in Dubai, Cape Town, Conakry, Madagascar, and Lubumbashi in Congo (DRC).
Mr Alabbar, who has extensive Asian retail interests, met Mr Bukhary, his business partner in both the smelter and AMER, through Mahathir Mohamad, the former Malaysian prime minister.
Mr Bukhary, one of Malaysia’s wealthiest entrepreneurs, then introduced the Dubai executive to Giorgio Armani, an encounter that developed into the Italian designer’s first hotel, located in Burj Khalifa, the world’s tallest tower.
However, the completion in early 2010 of Dubai’s landmark tower marked a shift in Mr Alabbar’s political fortunes.
Then he and two of his lieutenants paid a price for advising Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler, through the emirate’s real estate boom.
Mr Alabbar, who founded Emaar in 1997, remains committed as executive chairman at the company, a vital role given the emirate’s damaged property market. Dubai’s biggest listed company has come out of the crash in better shape than its peers, but there is still work to do as a wall of supply exerts pressure on valuations.
Later this month, Emaar is announcing a strategic review that will shape the international future of its subsidiaries, whose business lines span real estate, hospitality and retail.
“They sidelined me maybe. OK, no problem – it’s only right that people come, do a good job and move on,” he says.
“Every 10 years, you have to reinvent yourself – that’s healthy.”
