May. 15. 2006
Marubeni Corporation is pleased to announce the conclusion of a basic agreement with the government of Abu Dhabi Emirate, UAE (hereinafter, “Abu Dhabi”), to establish a joint venture with the aim of conducting a feasibility study. Marubeni has established a partnership with Abu Dhabi and been negotiating with Abu Dhabi’s Department of Planning and Economy (DOPE) since May 2005 to establish a general trading company in Abu Dhabi.
1. Background and Development
The Abu Dhabi government, which is striving to release itself from its economic dependence on energy, has decided to introduce business models of Japanese general trading companies that cover all industries. The decision aims to make use of the large amount of funding available to Abu Dhabi and the unique diplomatic relationships that it has established with the Middle East and North African countries. The decision is also intended to develop and facilitate the expansion of domestic industries and to promote trade and investment.
Marubeni has long contributed to the development of power system and infrastructure in Abu Dhabi since the early 1970s and has also made significant contributions to trade in products related to energy. These contributions have been warmly welcomed by the Abu Dhabi Government and resulted in the nomination of a partner company to establish a joint general trading company with us.
If the results of the feasibility study to be conducted by the joint venture are positive, we will establish an unlisted Abu Dhabi corporation, Abu Dhabi Trading House, as a general trading company. The corporation (hereinafter, “Abu Dhabi Trading House”) will be capitalized to the necessary amount.
2. Overview of the Company
The authorized capital of Abu Dhabi Trading House is planned to be USD15 million. Abu Dhabi interests, including DOPE, will hold 60% of shares and Marubeni will hold the remaining 40%. Abu Dhabi Trading House will focus on the core activities of foreign trade, investment and project management. As a holding company, it will establish operating companies under its control that will be engaged in each business activity. The markets targeted are UAE, including Abu Dhabi Emirate, as well as countries in the Middle East and North African area that have unique relationships with Abu Dhabi. By coordinating Abu Dhabi’s strengths, such as financial ability and credit standing, with Marubeni’s capacity to offer goods and services and its ability to complete construction projects, the Company will look to establish a variety of business in the area.
3. Business Topics in the Feasibility Study
After the joint venture is established, it will work on a feasibility study and business plan on the following potential business items: