ABU DHABI METAL PIPES

1

• ABU DHABI METAL PIPES PROFILES
• INDUSTRIES COMPLEX

Dubai Commodity Receipt In Practice.
Dubai, 18 May 2008
2
ADPICO
3
ADPICO production model

• Producing tube and pipes for construction, oil
  and gas sector targeting customers both inside
  and outside GCC.
  
• Main raw material, hot rolled coiled Steel (HRC)
• HRC is cut into narrow strips which is then used
  for tube production
  
• Details of monthly production run mix is order
  book driven. This in turn drives our procurement.
  
  

4
Why here ?
GCC Flat Products Market Supply and Demand up to
2010
5
Application of DCR

• Raw material (HRC) is by far the most important
  cost in the production of the final product.
  
• Smart strategic procurement policy and management
  supply of supply chain will ultimately determine
  the success of the company
  
• ADPICO sources for raw material As close as
  Saudi and Iran to further India, Russia, Far
  East. Which ever make commercial sense.
  
• Lead time varies from 2 weeks to up to 3 months.
• Needed to manage and generate financing lines
  capable of supporting this business model.
  
• DCR has enabled our financiers to make secure
  borrowing against HRC and has helped us gain
  access to supplies from the these markets.

6
Why ADPICO uses DCR

• HRC is a widely utilized commodity yet at present
  there is no recognized Institutional platform or
  derivative financial products to support it.
  
• In UAE HRC is all imported and is a scarce
  resource. It was essential that we found a
  financing structure to support large volume
  purchases over long time frames.
• DCR enables us to purchase and maintain the
  optimal amount of Raw Material Inventory with out
  tying up excessive amounts of working capital.
  
• DCR online platform allows us to deal with
  multiple financiers and traders on a secure
  common platform. Operationally - very effective.
  
• DCR enables us to do this at reasonable cost as
  the lending is secured.
  
• DCR is backed by DMCC.
• Our bankers both current and prospective
  currently find lending against a commodity an
  attractive alternative to lending in other
  Industries (Construction / Real Estate ?)

7
Champions of the Concept
8

• ABU DHABI METAL PIPES PROFILES
• INDUSTRIES COMPLEX

WWW.ADPICO.COM