Thinking too small has never been a problem at Dubai-based processor Nova Industries.
Darvesh (l) and Sharma see a metallic glimmer in Novas future.
This film processor, part of the family-owned Darvesh Group, announced in January that it plans to launch the worlds largest aluminum smelting plant under one roof, to be located on a 1-million-ft² plot in Dubai Industrial City, not far from its cast- and blown-film operations.
Specialization is the key and seeking niches that sell are how we are driving this company, says Hassan Darvesh, CEO, and the fourth-generation Darvesh to be involved in the family business. Nova Industries, which only started operations 10 years ago, now is one of the Middle Easts prime producers of cast polypropylene (CPP; 1500 tonnes/mo), multilayer blown film (500 tonnes/mo), and tapes (250 tonnes/mo). Cast stretch and cast cling films are also growing.
The packaging market in the Middle East grew 6% from 1996-2002, says Darvesh, and I believe that by 2015 half of all packaging needs in this area will be made of plastics. Biggest demand is coming from metalized and laminated flexible packaging for snack food, anti-fog film for meat packaging, retort films and bags for quick food preparation, and barrier structures made of metallocene polyethylene with EVOH or nylon cores for packaging such products as edible oil. His confidence has been reflected by action, with new investments at the 450-man processing operations.
A mix of European-brand processing equipment is important, says Kamal Sharma, general manager production at the company, to meet customer demands for consistent quality. In April, Nova installed a new cast/stretch line from Macchi (Venegono Inf., Italy) and the company has ordered a cast CPP line from SML Maschinengesellschaft (Lenzing, Austria) with an vapor deposition metalizer from Allied Materials (Alzenau, Germany). It also has slitter/rewinders from Kampf (Wiehl, Germany).
Nova Industries sees itself as being a big customer for foils of the new ?591,000,000 aluminum smelter once it is completed in 2010. Output will include aluminum composite panels for the building and construction sector, semi-rigid containers, pharmaceutical packaging, and lamination foils. Hassan Darveshs father and group director, Ahsan Hassan Darvesh, has taken over the planning of this giant project, Noval, that upon completion is to have a 135,000-tonnes/yr capacity. Initial construction began in July and the first phase production should start by the end of next year.
Hassan Darvesh warns, however, that many Middle Eastern processors have not followed the same strategy as his processing operations and are not looking to produce value-added applications.
Their complacency in producing low- value, commodity products could lead to more consolidation within the Middle Eastern processing sector in the future, Sharma says. Niche markets are where you get your return on investment, he says. And he points out that Nova Industries believes it has a cushion in its specialties that in tough times, which he sees coming as early as 2008 with falling prices and a sector awash with commodity polymer, could see a number of local processing casualties.
Today 65% of the companys output is sold within the U.A.E. and because the local demand for blown film has expanded so much, Nova has had to cut back its export efforts just to serve local markets. Darvesh says what the region really needs is a kind of packaging films institute to help train people and develop new packaging solutions. He points to the recently instituted Gulf Plastics Pipe Academy (e-Weekly, MPW, April 26) as a model and says the same idea could be initiated for his sector.
You need to look for an opportunity where others have not already taken the market and concentrate on that niche, says Darvesh. Thats how success is built.