Malaysia's MMC Expanding Middle East Scope with Power Project in United Arab Emirates

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Researched by Industrial Info Resources (Sugar Land, Texas)--Companies belonging to Malaysia's MMC Corporation Berhad (KUL:MMCCORP) (Kuala Lumpur) are making significant inroads into the Middle East power and industrial sectors. In May, subsidiary MMC International Holdings Limited was announced as a 20% stakeholder in the consortium to construct the 1 million-ton-per-year aluminum smelter in Saudi Arabia's Jazan Economic City and as a 50% owner of the 2,460-megawatt power plant to feed the smelter. In mid-July another subsidiary, MMC Utilities Limited, was granted exclusive rights to build a power plant in Ajman, United Arab Emirates.

Looking to capture more foreign orders, MMC sees the power project, the company's first in the United Arab Emirates, as part of a strategy to ensure sustainable earnings for the group. MMC International's core activities are in the logistics and utilities sectors, which form the base for its bidding on various projects in the Middle East. Projects include investments in a new container terminal at the Jeddah Islamic Port comprising three berths with a capacity of 1.5 million 20-foot-equivalent units. The company also has an interest in the Shuaibah independent water and power plant project in Saudi Arabia, a desalination plant in Algeria, the Central Electricity Generation Company in Jordan and the Dhofar Power Company in Oman.

The power project agreement with the government of Ajman gives MMC exclusive rights to conduct technical and economic feasibility studies followed by the establishment of a concession company that will manage, operate and maintain the power plant for 20 years. The power produced during the total concession period will be purchased by Ajman's government.

In addition to its smelter and power plant stakes in Saudi Arabia, MMC is also looking to hold a 50% stake in Jazan's new port, which will handle cargo traffic for the smelter project. For related information, see May 20, 2008, article - Three Firms to Build 1 Million-Ton Electrolytic Aluminum Project in Saudi Arabia.

The Malaysian company is in a position to identify opportunities in Jazan, which was expected to attract $30 billion in investments over 25 years when launched in 2006. In 2007, after one year of existence, it had already attracted $18 billion investments, excluding a planned oil refinery.

The city will develop two aluminum smelters, a steel mill and an iron ore hub. An automotive cluster will be fed by the aluminum smelter, and downstream aluminum industries will be developed. The master plan contains a marine industrial complex, a primary metal-processing facility, a copper processing plant, a zinc processing plant, a metal fabrication facility and agro-based industry. Secondary industries, such as silicon processing and the production of pharmaceuticals, chemicals, plastics and construction materials, will also be represented.

MMC Corporation owns the Port of Tanjung Pelepas, Malaysia's largest container terminal and the country's largest multipurpose port, the Johor Port. It also owns Malakoff, the country's largest independent power producer, and Gas Malaysia, West Malaysia's sole supplier of natural gas to the non-power sector.

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