Within a short span of time Emaar Industries and Investments (EII) has become a force to reckon with in the regional investment set-up.

Following a series of deals, some announced and others in the pipeline, EII is on course to carve out a niche for itself that will redefine the course of industrial development in the region, according to a senior company official.

Established in August 2005, EII, a member of Emaar Properties, set out as a global investor to capitalise on growth prospects in the manufacturing sector.

EII strengthens industries by investing in existing businesses and establishing joint ventures with leading establishments.

Since inception the company has grown substantially in terms of investments and diversification in different sectors and currently has nine companies in its portfolio and expects to have a total of 15 by the end of this year.

EII expects an average 200 per cent increase in its business beginning next year, as it is set to acquire the additional companies over the coming months in the manufacturing industry and other non-oil-related sectors.   

The company is expecting to invest a total of Dh800 million ($217.8 million) for the new acquisitions until the end of this year.

Now in its second year of operations, EII started building up its portfolio in 2006.

“It is easy to talk about numbers but what we are looking at is the quality of the companies,” says Dr Ahmad Khayyat, chief executive officer, EII. 

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“During 2006, our first year of operation, we acquired a total of seven companies. These acquisitions have, in terms of sales and revenue, grown over 300 per cent over 2005,” he adds.

For example, one of its subsidiaries, Multiforms, which deals with aluminium and steel cladding, registered a 120 per cent growth in revenues; net profit increased by 516 per cent and returns on investment grew from 12.1 to 72 per cent.

Another subsidiary Haseeb Rasoul, a leading manufacture of furniture and furniture fit-outs, saw revenue growing by 66 per cent, net profits by 70 per cent and RoI from 10.8 to 18.3 per cent.

Also Starwood Industries, involved in the manufacture, installation and trade of wooden and aluminium doors, wardrobes and kitchen cabinets, gained revenue growth of 67 per cent and net profit growth of 54 per cent following EII’s acquisition.

The RoI of Starwood increased from 11.3 to 17.5 per cent in just one year.

The consolidated revenue generated by all its current subsidiaries in 2007 is expected to be around Dh1.3 billion.

“EII’s expansion strategy is in line with the Dubai Strategic Plan 2015, which calls for the development of non-oil-related industries,” says Dr Khayyat.

“The manufacturing sector, which has gained new momentum in recent years following the country’s economic diversification drive aimed at growing the non-oil sector, currently accounts for 19.2 per cent of the GDP.

“Entrepreneurs still face increasing challenges in raising capital to fund their operations while maintaining healthy margins.

“This is where private equity makes an impact and where EII has an impressive role as an investor, and partner with its subsidiary companies. We were seeded with Dh250 million initially and currently we are in the process of raising funds through several instruments,” says Dr Khayyat.

“We consider ourselves as a long-term strategic investor as the ME region offers a lot of investment opportunities,” he goes on to say.

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Economic diversification is being pursued and the region is expected to witness over the next few years the establishment of environmentally safe, technologically advanced and capital-intensive industries producing high value products that could compete in international markets.

The development of manufacturing capability offers econom