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Group Five wins airport contracts in Dubai |
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3/9/2006 8:45:13 AM |
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Inet Bridge -
Group Five's foray into the increasingly lucrative Dubai market is gathering momentum
By Siseko Njobeni
Group Five's foray into the increasingly lucrative Dubai market is gathering momentum, with the company on Tuesday announcing two further contracts with a combined value of R1,7 billion.
Group Five will be working on the new contracts in a consortium with sponsor Al Naboodah.
The company's CEO, Mike Lomas, said the value to Group Five of the contracts was R572 million.
Since it opened offices in Dubai two years ago, Group Five has seen an increase in the order book of its civils, roads and earthworks businesses.
The group has been awarded contracts of about R2 billion.
In its interim results, released last month, the group said it expected an improvement in its margins for the second half of the year partly as a result of the increased activity in Dubai.
In terms of the contracts, Group Five and Al Naboodah would construct a duty-free warehouse at the Dubai Airport valued at R115 million and an airfield and infrastructure at the new Jebel Ali Airport City, 40km from Dubai International Airport.
The proposed airport city would comprise an airport and several smaller "cities" that would cater for the financial, industrial, services and tourism industries.
Group Five already has a contract at Dubai International Airport. Last June Dubai Civil Aviation awarded the company a R940 million contract for the construction of the Cargo Mega Terminal.
Lomas said: "As we said at results time, our Dubai business is doing extremely well.
"We are very focused in what work we take on to make sure that we can deliver on time and benefit from the higher margins that can be extracted from these margins."
Lomas has in the past said the company was looking for high-margin markets and identified Dubai as an ideal market. He said Group Five's strategy was to work in fewer, high-margin markets.
As a result they were pulling out of some markets in African countries, he said.
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