Tabreed eyes further Gulf expansion as opportunities arise

National Central Cooling Company, also known as Tabreed, is optimistic on growth prospects as new projects in at least two Gulf countries come on stream this year, the chief executive officer told Gulf News.

The district cooling company listed on the Dubai Financial Market (DFM) has seventy one plants across the GCC with over one million refrigeration tonnes (RT) of capacity. It is working on new projects adding to its existing projects in UAE, Oman, Bahrain, Qatar and Saudi Arabia that will add another 60,000 RT over the next two years.

“The first phase of King Khalid International Airport district cooling project in Riyadh is expected to be completed in the third quarter and the construction of a new district cooling plant in Doha will be completed in the first half of this year,” Jasim HusainThabet said in an interview.

“We are working on several opportunities in the region and are optimistic about our growth. We are trying to expand our operations with new connections and projects which we will announce once we get closer to the signing,” he said.

The company owns 63 district cooling plants in the UAE, three in Qatar, two each in Saudi Arabia and Oman and one in Bahrain. The UAE has the largest number which are spread across the country in Abu Dhabi, Dubai and other emirates

Speaking about Saudi Arabia, he said it is a crucial market with new opportunities and growth potential as the country opens up to attract new foreign investment in line with the Saudi Transformation plan 2030.

“Saudi Arabia is an important market for us. Our first project was with Saudi Aramco to provide cooling to Aramco facilities in Dhahran. Last year, we expanded the project by another 5,000 tonnes taking the capacity to 32,000 tonnes of cooling on the East coast.”

“On the West coast, we have the Jabal Omar Development project in Mecca. The project has been expanded to increase its capacity by more than 10,000 tonnes in 2016 to take the total capacity up to 45,000 tonnes. We have an operation maintenance contract in Riyadh for another asset.”

In Qatar, Tabreed has three plants in operation currently with a total capacity of 188,000 refrigerated tonnes. Two plants are located in the West Bay and one in Pearl Qatar, both situated in Doha.

When asked whether low oil prices and a slowdown in the real estate market in the Gulf region will have any impact on the operations of the company, he said it will not impact them negatively and see new opportunities as countries focus on energy efficiency systems to save money.

“The whole idea of our business model of district cooling is to save energy. When you compare district cooling with the conventional normal cooling, district cooling is more energy efficient and helps in saving money.”

“In Abu Dhabi for example, peak power requirement last year was 13 gigawatts and in the peak summer, 70 per cent of that power goes to cooling so when you have cooling option which is 50 per cent more energy efficient, you can imagine the benefit of savings to the end users.”

Abu Dhabi’s Mubadala which is the largest shareholder in Tabreed was considering the sale of part of its stake according to media reports in November. When asked about this, Thabet declined to comment on speculation but said that Mubadala had supported it in 2011 through capital injection and will continue to support the company.

Mubadala holds 13.39 per cent of Tabreed’s shares directly and 19.88 per cent thorough an affiliate, according to Tabreed’s 2015 corporate governance reports. Mubadala has been formally merged with International Petroleum Investment Company.

Thabet also said they will be actively looking for acquisitions if it makes sense for their shareholders. The company acquired a district cooling plant from International Capital Trading in Abu Dhabi last year.

Tabreed posted a six per cent increase in its profit for 2016 to reach Dh367 million as it added new cooling capacity and acquired a plant from International Capital Trading in Abu Dhabi. Revenue also increased by six per cent to reach Dh1.28 billion last year compared to Dh1.2 billion in 2015.

“There is opportunity for Tabreed. We are 50 per cent more energy efficient compared to alternative. Over 50 per cent of our revenue comes from government contracts

source : gulfnews