We started this business in 1984. We are in the precast business, which means that we prepare precast concrete components, like walls, slabs, columns and beams. One of our main and most challenging projects is the new Abu Dhabi Airport terminal, the Midfield Terminal. We are manufacturing these huge beams, slabs, also, and columns, and taking them to site, which is very near to the factory, and erecting and assembling the whole thing together. Midfield Terminal is actually a $3.3 billion project. This is going to be the home for the national airline of the Abu Dhabi government called Etihad Airways.
We had to import machinery, we had to import cranes and we are importing raw materials like strands and structural steel. Many of these imports are from China. The client has a genuine trade flow between UAE and China on a regular basis. The value addition we provided was the opportunity for the client to move from the dollar-denominated transaction to an RMB, which will help them with cost. So, the RMB transaction will allow them to save at least a 5% to 7% margin on the currency fluctuation. At the beginning we thought, «Why?» We had been dealing with US dollars for the last 30 years and it was OK. I mean, it’s budgeted and everything and we thought, «Why?» But then we thought, «Why not?» When they explained to us the advantages, it looked OK. The local companies here need education.
What’s in it for the company, trading in RMB instead of US dollars, is the same, actually, for the Chinese suppliers, as well. Luckily, this customer is banking with us in China and we have a very good relationship with the customer, so I bridge a call between colleagues in MENA and colleagues in China. After we had agreement on everything, our Chinese colleagues went to the supplier, just to educate them on what we can do and also assure them we will be there to walk them through the whole process. Now, a couple of months into the project we are witnessing on a daily basis the transactions and interactions. It looks good. We hope it’ll make a big difference by the end of the project. We were successful with this particular transaction because we worked as one team. Global Markets, GTRF and the Corporate Banking RM worked closely together to understand the client, place a proposition that works for him and benefits him and, at the same time, manage or mitigate the risk, so that the client has a value addition at the end.