Conmix builds a solid future within the UAE

Conmix marks 30 years of business in the UAE this November. The region’s construction boom has triggered rapid growth for the company, with turnover increasing five times in the past 10 years. Construction Week speaks to Lothar Hellenkamp, CEO of Conmix, about the outlook for the local cement market.

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By  Colin Foreman Published  August 20, 2005

Conmix builds a solid future within the UAE|~|Hellenkamp-200.jpg|~|Lothar Hellenkamp, CEO, Conmix, says: “Cement prices are pretty stable this year... I now expect them to remain stable for at least one year.” |~|How has the business changed over the last 30 years?

It has changed a lot because the company has grown so much. Ten years ago the company had just one location in Sharjah — it now has five locations across the UAE, as well as a company in India.
In terms of turnover the company has grown five times over the last 10 years, and that is mainly due to the boom in the construction industry.

Has Conmix always been based in Sharjah?

It’s a Sharjah-based company with a German partner — Karl Epple in Stuttgart.

Where are the company’s readymix plants loc-ated?

We have a plant in Dubai Investments Park, close to Jebel Ali; one in Al Quoz Industrial Area; the main facility in Sharjah; another under construction in Ajman; plus a plant in Umm Al Quwain.

Where does most of your business come from?

At the moment it’s equally spread across a stretch of about 100 km, starting at the border of Umm Al Quwain and Ras Al Khaimah in the north, down to Jebel Ali.

Does Conmix just supply readymix?

The company also supplies plasters and construction chemicals. Unlike readymix, distance is not so important for those products.
We have an export business and right now we export to
20 countries. We cover all the GCC countries, the East African countries, Bangladesh, Sri Lanka, India and Pakistan.

Why has the company developed its export markets?

Because exports allow the company to become less dependent on the Emirates.
There will be a significant over-supply in a few years because the huge projects we see now all need exorbitant installed capacities in respect to building materials.
Once these projects have been completed or near
completion, demand will fall. There will be a huge imbalance in supply and demand in the market for building materials and it will crash.
That is why we are concentrating a lot on diversifying
our business. Our latest diversification is construction chemicals such as concrete repair mortars, waterproofing systems and industrial floorings.

How is business faring in the often forgotten emirates north of Dubai?

They are also participating in the momentum that Dubai has generated.
The new Emirates link road has greatly improved the traffic situation and the travelling times between the emirates of Dubai, Ajman, Umm Al Quwain and Ras Al Khamiah have become much shorter, so many now expect a construction boom is on the way.
At the moment it doesn’t make sense for someone who lives in Ajman to commute to Dubai everyday, but with the new link road, someone from Ajman can reach now Dubai in a very short period of time.

After grabbing all the headlines last year, how have cement prices been this year?

It’s been pretty stable this year. Prices skyrocketed in May last year, and reached their limit in July last year, which was about AED320 per tonne for bulk cement.
The prices then came back down to AED250, but since then demand has remained very high and cement suppliers have increased the prices by about AED10. I now expect cement prices to remain stable for at least one year.
Last year cement was offered in an auction kind of way. It
was like highway robbery because the cement was auctioned off and at certain times you had to pay more than AED320 per tonne just to get a supply of cement.

Do you think that prices have stabilised because the installed capacity of the producers has increased?

Right now, the installed capacity in the UAE is about 12 million tonnes and within a period of two years it will increase to 20 million tonnes plus.
The capacity has already increased significantly from last year when the capacity was 8 to 9 million tonnes.||**||

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