A part in the UAE’s local manufacturing story Walid-Ali-ABED

ADNOC recently signed a USD 9.5-billion scheme to boost local manufacturing in the UAE and we have been selected by the NOC to be part of this story.

Walid Ali ABED General Manager IMCC INVESTMENT

A part in the UAE’s local manufacturing story

January 30, 2023

Walid Abed, general manager of IMCC Investment, talks to The Energy Year about the company’s ongoing diversification, including forays into manufacturing and renewables, and how it succeeded in maintaining business continuity in recent years. IMCC Investment is a fabricator working in the oil and gas, renewables, marine and manufacturing sectors.

In what ways are you getting involved in manufacturing as part of your diversification?
The government and local authorities are pushing to boost economic performance through enhancing local manufacturing capabilities and to maximise the in-country value (ICV). Accordingly, ADNOC recently signed a USD 9.5-billion scheme to boost local manufacturing in the UAE and we have been selected by the NOC to be part of this story. We have signed three MoUs to venture into the manufacturing of three different products: pressure vessels, pig accessories and seamless pipe fittings in the United Arab Emirates.
This means that in subsequent years we will work as a strategic manufacturer within this special scheme promoted by ADNOC, offering our well-established in-country fabrication capabilities. This move matches well with the strategy we already had in place of diversifying our service portfolio.
As a fabricator that is established to cater large-scale projects, and while considering that these projects follow the cyclical nature of the industry – cropping up every four to five years – and coupled with relatively lengthy tendering and procurement processes, such as the Hail and Ghasha mega-project, and to counterbalance the economic effect of this cyclic nature, it is essential for us to diversify our service offerings with a balanced portfolio, ensuring a steady growth and revenue stream.

How will your new manufacturing MoU with ADNOC impact IMCC Investment?
We are still at an early stage of the execution of the MoU, and we have six months to evaluate the business. Initially, we are committed to fabricating three different products: piping, high-pressure vessels and some other accessories. These products were selected carefully as enablers for us to achieve our strategic objectives and desired growth. For instance, we already manufacture pressure vessels and we have the stipulated certifications. However, there is additional investment that needs to be done in our facilities, such as engineering capabilities and machinery for endcaps/ dished heads which we are currently outsourcing, in order for us to deliver final products.
As for piping, we need some infrastructure to enhance our capabilities in this segment. There is a scope and volume of work we currently don’t reach, and this MoU is a fundamental enabler that will help us access this market and compete in it. Collaboration in this space is also fundamental. You see, when it comes to manufacturing, it is difficult to compete with countries such as India and China that produce very high volumes and at lower prices. This collaboration with ADNOC under the premise of “Made in the UAE” is therefore bound to change our position in the UAE moving forwards.


How have you managed to maintain business continuity lately and what areas have you been active in?
We have managed to establish a strong footprint in the market over the last 45 years. However, since 2018 we have witnessed a downturn in the oil and gas sector, closely followed by the pandemic. Although we were hit by these events, and more so with the delay in the awarding and development of projects, we have continued to carry out business as usual. Mechanisms such as the diversification of our portfolio have been essential to continue working in these hardship times. In parallel is a fit-for-purpose restructuring, while driving cost synergies across the organisation and maintaining the adequate qualified workforce to immediately execute new projects, which has paid dividends to our sustainability during this recent challenging environment.
We are active in providing services to the marine vessel segment, where we have continued working with clients that are fundamental for us, such as but not limited to ADNOC, ZMI, Allianz and others. For example, we recently completed two rig upgrades for ADNOC Drilling on schedule and respecting the timeframes, completing multiple jackup barges’ maintenance and repairs. It has been a positive learning curve for us.
This relates to our offshore vessels segment, where our strategy is to have a one-stop shop for marine vessel maintenance and upgrade work. We are now betting on the vessel segment, with the only gravel dry dock in Abu Dhabi along with 1.1 kilometres of quayside. We are also exploring other possible business venues that could add value to us.

What further diversifying pathways have you taken within the energy industry?
When talking about diversification, we are looking to expand our focus to renewables. We have pursued some offshore wind farm prospects in countries such as Australia, Norway and France as we see this as a prospective market moving forward. However, labour union regulations in these countries have made the road bumpy. In this regard, we maintain a tight-knit relationship with tier-one EPC companies for the pursuance of major renewables projects.
We are also exploring possible contributions to the NEOM project in Saudi Arabia, on the crane side. We are qualified and we have overseas partners to provide unmanned hydrogen- or ammonia-fuelled engines. Our crane business segment now represents around 10% of our business. In that area, we are delivering a project that includes five rubber-tyred gantry (RTG) cranes for the Chittagong Port Authority in Bangladesh in March 2023.

What efforts have you made to upgrade and refine your offering in the light of the industry’s growth?
We have refined and tuned our capabilities in the areas where we offer “services.” We are prime fabrication players in the areas of offshore structures, onshore modules, FPSO topside components and rigs. However, in recent years we have tried to become a one-stop shop for rigs and vessel work by reinstating our capabilities and existing infrastructure in order to be able to qualify and receive new orders.
The utilisation rate of our facility stands at a lower level than desired, so we are now eager to take on more work. We have facilities that span more than 600,000 square metres with a capability to fabricate over 50,000 tonnes of steel per year at their peak. We are also the only fabrication yard with a gravel dry-dock facility in Abu Dhabi. We reinstated it after it was left unused for a long time. We have made countless efforts to bring our facilities up from scratch for these coming years of growth in the industry.
We’ve also made sure to have our ISO certifications in compliance with the different business offerings we have. We maintain the highest global standards and these have served as enablers to pursue new contracts. Our efforts have been fruitful and we recently signed an exclusive agreement with Keppel FELS [KF], a global leader in the design, construction and repair of mobile offshore rigs, where the agreement is set to have a reciprocal collaboration as KF will support IMCC on certain rig engineering aspects while IMCC is their nominated shipyard for work to be carried out in the GCC region.

What key steps are you taking to ensure a successful 2023 in terms of contracts and execution?
When it comes to contracts, for the year 2023 we are expecting a huge volume of work to come. The UAE’s fabrication yards will be working at full steam given the many important developments witnessed in the upstream sector, namely the Hail and Ghasha, Umm Al Sheif, wellhead towers and other mega-projects. We are involved in the construction side of these projects with their main EPC contractors. For ventures like these, we have different partnerships in place with tier-one EPC companies. Depending on the project and the arrangements, in some we go in as a partnership, in some we set up consortiums and in some we do contracts or subcontract arrangements. We are even open for any other business venues required as a vehicle to pursue a specific project.
Our pipeline of opportunities for 2023 is greater than USD 1 billion. Those are the opportunities we are currently pursuing via tenders, and we are now waiting for the awards. Out of that total value of projects we have tendered for, I would say that 60% will go to international companies, and 40% to local ones. A winning rate of 5-10% would represent a good start for the year 2023.
For the execution, we have identified and are considering multiple strategic enablers, such as but not limited to: enriching the core organisation while developing a high-skilled workforce, strengthening our in-house capabilities while focusing on improving efficiencies of our services delivery, and broadening our strategic alliance and partnerships with third parties identified for action. In addition to this, we must make sure we improve our profitability, as well as retain and improve our human capital. These are the key steps towards enjoying a prosperous 2023.

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