Aabar Investments will vote tomorrow on plans to build vehicle factories in Algeria with five German partners, which would make it a major industrial partner, as well as the single-largest owner, of Daimler.
Aabar mulls Daimler factories deal
Aabar Investments directors will vote tomorrow on plans to build vehicle factories in Algeria with five German partners, which would make it a major industrial partner, as well as the single-largest owner, of Daimler. The investment arm of the Abu Dhabi Government said its board of directors would consider "an investment in an Algerian joint venture company for the production of various vehicles".
The board will also consider setting up a joint venture to produce tunnel-boring machinery in Abu Dhabi in an effort to tap into rising demand for the equipment, as Gulf nations invest heavily in mass transit projects, according to an Aabar statement on the website of the Abu Dhabi Securities Exchange. A spokesman for Aabar declined to discuss specifics but confirmed that the vehicle proposal related to plans announced last August with the German companies and the Algerian government to set up factories there to make four-wheel-drive vehicles and engines.
The alliance comprises the German partners Daimler, MAN Ferrostaal, MTU Aero Engines, the engine maker Deutz and components maker Rheinmetall, and the venture could produce as many as 10,000 vehicles per year, reportedly including Mercedes military vehicles. The first factories could be set up by the end of this year with the overall investment pegged at about US$720 million (Dh2.64bn). "With this investment, Aabar continues to develop opportunities through our partnership with Daimler," Khadem al Qubaisi, the chairman of Aabar, said at the time.
Aabar is the largest shareholder in Daimler after it acquired a 9.1 per cent stake in the German car giant last year for $2.7bn. Aabar later purchased a stake in Tesla, the US maker of electric sports cars, from Daimler. In addition, Aabar's largest stakeholder, Abu Dhabi's International Petroleum Investment Company, owns 70 per cent of MAN Ferrostaal. Under the terms of the Algerian deal announced last year, MAN Ferrostaal will act as the project lead, with the other firms serving as technology partners to provide licences and intellectual property.
Aabar is coming off a string of high-profile investments totalling billions of dollars, which have diversified its portfolio to include property, construction, banking, electric vehicles, motor racing and now the industrial sector. Last week it took a $20m stake in XOJET, a Californian business jet operator with plans to open for business in Abu Dhabi. An Algerian venture would be one of Daimler's latest overseas projects. One of Daimler's early offshore facilities was set up in Pune, India, in 1994. Three years ago it set up a second factory in India's Maharashtra state. It also has factories in Brazil.
Last week the company announced it would seek further inroads into the growing Iraqi market by building a factory there to assemble lorries. Daimler said it would supply tools and equipment to assemble lorries as well as on-site technical support for Iraq's State Company for Automotive Industry. The plant would export both assembly kits and complete Mercedes-Benz lorries. Aabar officials declined to discuss the venture to produce tunnel-boring machinery, other than to say that the business would be located in Abu Dhabi and the partner was from Germany.
The business could seek to capture it share of the multibillion-dollar transport projects seen for the emirate as part of its 2030 plan. Much of the plan's 130km-long metro system would be underground. The first lines could be open as early as 2016. In addition, there are proposals for motorway tunnels, including several from the Abu Dhabi Corniche to Lulu Island. @Email:email@example.com