ELIPS, the joint venture between Empower and Logstor, was awarded its first contract for insulated pipes by the Energy City development in Qatar, two months after opening its factory in Jebel Ali, Dubai in January.
The order for 13km for district cooling piping was won by Logstor, the Danish piping company that owns 49 percent of ELIPS. A “good proportion” of the piping will be manufactured in the Jebel Ali plant, revealed Sohrap Zuberi, director at ELIPS and at majority owner Empower.
Zuberi believes that placing the first order with Energy City will generate more business. “The moment they see the quality of what we are supplying, that’s the best selling point for us to do it again. Getting 10 km the first time round is harder than getting 50km next time.”
Zuberi also confirmed that ELIPS is bidding for orders in the oil and gas markets.
Dual purpose
With Empower keen to secure the supply of high quality insulated piping for its district cooling projects, it signed the JV agreement with Logstor in 2007, “Empower needs pipes with the same level of reliability as used in the oil and gas market,” says Zuberi.
Logstor’s expertise in this field resulted in a plant that is not only able to deliver high-calibre piping for district cooling use. The factory can also supply piping to oil and gas projects. This flexibility is unique to the UAE, according to Zuberi.
Being able to service different markets provides a safeguard against fluctuations in demand. “We are able to bid for both industries from one business,” says Zuberi.
It does, however, also pose challenges due to the length and dimensions of a typical oil and gas order. Whereas district cooling facilities require several kilometers of piping, oil and gas is often transported via several hundreds of kilometers of pipeline.
One such project can consequently take up between six months and a year of production capacity, leaving typical plants unable to service its core district cooling market. To avoid bottlenecks, the ELIPS factory can expand its production capacity at short notice, and is able to call upon a flexible workforce.
While Empower entered the JV with the objective of securing backward integration, Zuberi says that Empower offers no takeoff guarantee to ELIPS, who have to convince the parent company on price, quality and service.
With this in mind, it comes as a relief that the first order is already in the bag.
