CAIRO: Dubai-based builder Arabtec announced a joint venture with Egypt’s Amer Group on Sunday, helping it expand abroad as the emirate’s once-booming property sector struggles to recover from the financial crisis.
Arabtec expects its revenue to fall to between $1.5 billion and $1.75 billion in 2010 from about $2 billion in 2009, stung by the slow property market in the United Arab Emirates, Arabtec Chief Executive Riad Kamal told reporters.
He said the firm was shifting abroad to make up for slipping demand in the UAE, and that he saw Egypt, where the property market has weathered the crisis relatively well, contributing no less than 15 percent of its turnover within three years.
"The bulk of our presence is in the UAE, and the UAE market has been on a decline. This is the reason why we are spreading very fast outside," Kamal said.
Arabtec will own 55 percent of the venture, Arabtec Egypt for Construction SAE, which will have authorized capital of LE 100 million ($17.5 million), the companies said in a statement.
Arabtec said earlier on Sunday that it had won a $53 million deal to develop Amer Group’s "Hanging Gardens" project at Golf Porto Sokhna, a Red Sea resort development.
Kamal said the new company was "100 percent" looking for acquisitions in Egypt and was working on a few additional deals for construction projects, but declined to give details.
"The point is to facilitate our entry into the Egyptian market by working with a partner," he said. "We aim to be one of the leading contracting firms that can compete in this market."
Amer Group has developments in Cairo and on Egypt’s Red Sea and Mediterranean coasts. It also has projects in the early stages in the UAE, Syria and Saudi Arabia.
Amer Group’s chairman, Mansour Amer, also said on Sunday the company was considering an initial public offering, but it was too early to give details.
Amer is building Golf Porto over 2.2 million square meters in the mountainous Ain el-Sokhna, where it will lay out a mountain-top 18-hole golf course.
Arabtec’s shares closed 1.8 percent lower at 2.24 dirhams a share on Sunday, outperforming Dubai’s main share index, which fell 2.3 percent.
In August, the Dubai builder said its net profit for the second-quarter dropped 40 percent.
