Danube revenue up 25% in a market

Despite price volatility of its commodity products, the building materials and furnishings company Danube still achieved 25 per cent revenue growth to Dh1.55 billion last year against Dh1.25 billion in 2010. This is the second year that the company has attained more than 20 per cent growth under market conditions that it described as being "under stress". This also keeps the Dubai company on track to reach its revenue target of more than Dh3 billion by 2015. Its range of wood products, for which prices were more stable, earned revenues of Dh751 million, while the rest came from the non-wood items. Article continues below While the company has been steadily expanding in key retail markets, distribution still accounts for the majority of its revenues — 88 per cent. According to a senior official, early indicators show that growth is likely to maintain double digits this year as well. This is based on the assumption that project activity has revived in the local market and many projects will be completed this year, which will in turn create more opportunities for the company's product line. There are also the many possibilities that can be derived from the other Gulf Cooperation Council (GCC) markets. "We are very positive and the reason is that we are expanding in Qatar, Saudi Arabia and Oman," said Chairman Rizwan Sajan. Both Saudi Arabia and Oman have announced substantial investments in social housing projects in the medium-term, while Qatar should soon begin the many projects planned between now and its hosting of the football World Cup in 2022. If the proposed initia-tives on social housing proceed on schedule, the next 48 months should see enough projects emerging to keep the region's contracting and ancillary industries busy. In the UAE, a trickle of property developments will be completed in the first six to eight months, which will be a fillip for the fit-out and furnishings sector. Last year, Danube added new locations in Saudi Arabia, Oman and Bahrain as part of a Dh200 million investment, which also saw it topping up its retail presence in the UAE and India. Another 10 showrooms will open in the GCC, and a greenfield melamine plant has been commissioned in Saudi Arabia. A new warehousing facility in Jebel Ali was also commissioned last year. "The move to expand has not only consolidated our regional leadership in the building materials segment but also driven a 25 per cent growth," said Sajan. "We are very confident that 2012 will bring in more growth for us."