In an end-February interview, Ahmad Bin Shafar, the Chief Executive Officer of Empower, revealed the company’s plans for further acquisitions, including a drive towards the two million tonnes of refrigeration (TR) mark. Here are excerpts from the interview, conducted by Rajiv Pillai, Features Writer, Climate Control Middle East…

What developments can you report a year since the acquisition of Palm District Cooling?

There have been good changes between 2013 and 2014. We have witnessed 76% growth on turnover. We were able to achieve a savings of seven per cent to 15% in the year 2014. Following the acquisition of Palm District Cooling, last year, we have grown into a company that holds the largest District Cooling portfolio in the world. This has resulted in the growth of our projects, capacity, assets and customers. Our company is providing services to many prestigious projects, and in the last 12 months, we have added more unique and world-class projects to our portfolio. We are the largest in the world now with about 1,045,000 TR in capacity. The vision of our leaders, under His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has contributed to our success year after year over the last decade. It is their support that has primed this country to not only build businesses but also build sustainable businesses.

Could you elaborate on your current financial performance?

Our revenues have reached from AED 850 million to AED 1.5 billion. Empower began 2014 with the acquisition of PDC, from Istithmar World, in a US$500 million agreement, and the year was significant as Empower successfully aligned operations of both the entities.

Our company continues generating healthy earnings before interest, taxes, depreciation and amortisation (EBITDA), and has accordingly re-paid loans amounting to AED 350 million during the year. We have also declared dividends to our shareholders for the second consecutive year, which demonstrates the robustness and the strength of our business model and our financing strategy. The dividend payment this year amounts to AED 250 million. Our development strategy, coupled with the government support for sustainable sectors, like District Cooling, will enable Empower to continue growing in the future.

What are the new projects you are supplying to, or working towards supplying to? Will you be supplying to the Madinat Jumeirah expansion project?

We have an AED 750 million agreement with TECOM Investments to provide the Dubai Design District (d3) with 120,000 TR of District Cooling services; it signifies a 12% capacity addition to Empower’s network. We also have a significant retrofitting agreement with the Jumeirah Group, under which Empower will convert the existing systems of iconic properties like Emirates Towers, Burj-Al Arab, Jumeirah Beach Hotel and the Madinat Jumeirah to District Cooling. And yes, we will be supplying to the Madinat Jumeirah expansion project, as well.

You have said before you would like to see only one District Cooling company supplying to the whole of Dubai. Would that not result in a monopolistic set up?

We know our business direction for the next seven years. We control 70% of Dubai, and we need another 30% of control. We are the cheapest. Our competitors charge more than us. We are studying to acquire more.

Now that you have reached the one million TR mark, what do you aim for? For instance, do you hope to scale up to a capacity of two million TR?

By 2018, we shall reach the two million TR capacity mark. Currently, we are 950,000 TR short. More acquisitions will definitely make it happen. We are predicting a 20% growth in 2016. Five new plants are already under construction.

In 2014, Empower also completed its second plant in Business Bay. The plant is the region’s first District Cooling facility of its size built as per the green building principles.
 
Do you have anything to share with the readers of Climate Control Middle East on the use of the Thermosyphon (hybrid) technology, resulting from the MoU you signed with JCI in December 2014?

I have nothing specific to share. Our technology team has been infatuated with the concept of Thermosyphon (hybrid) technology. We are always willing to invest in research and development, because we are interested in efficient systems.

Quick facts

• Empower has a total of 62 plants serving 49,850 customers.
• Out of the 49,850 customers, 49,104 are individuals and 746 of them are corporates.
• The company posted an 11% increase in its customer base from the previous year, going from 45,000 to 49,850.
• Empower recorded a four per cent increase in buildings, from 716 to 746.