Arkan Urbina JV

[sharewadi]

Arkan Building Materials (ARKAN) in the UAE and Urbina SA of Spain are forming a joint venture (JV) to build a scaffolding factory in Al Ain. Arkan shares rose 1.5% today, topping off a more than 30% increase in share price over the past week, from AED 4.00 to AED 4.35 today. Of course, there was no disclosure from Arakan released on the ADX website. Still, at least they didn't issue a statement saying they had no idea why their shares were going up - something they did last year before when Arkan bought 40% of Vision, and just before announcing an Arkan Korea JV.

But while many other companies are now trading at low single figure PEs and PBVs of around 1 or less, Arkan is still looking way overpriced at a PE of about 45 based on 08 9M earnings and a stratospheric 78 based on 08 3Q earnings (see Arkan Q3 financials). While PBV is just as high at almost 5. Well, the market is always right. There must be something I don't know that makes Arkan a platinum VIP class stock .

Press Release 27 November 2008:

Arkan and Urbina create new joint venture company to manufacture and supply scaffolding in the UAE ARKAN URBINA LLC will build a state-of-the-art scaffolding factory in Al Ain to serve the region’s construction, petrochemical and aeronautical industries Abu Dhabi, UAE: Arkan Building Materials PJSC (ARKAN) of Abu Dhabi and Urbina SA of Spain have incorporated a new joint venture company to supply scaffolding and related products to the Gulf region. The new company, which is called ARKAN URBINA LLC, will initially supply materials imported from Spain but will soon start building a scaffolding factory at the Arkan Industrial Park, Al Ain. Based in Abu Dhabi, ARKAN URBINA LLC will supply high-performance equipment to serve the construction, petrochemical and aeronautical industries throughout the Gulf region. The company will provide high-quality products and services whilst offering a variety of solutions to meet the exacting requirements of its customers. Commenting on the creation of ARKAN URBINA LLC, Mr Mohsen Al Marri of Arkan Building Materials, said, “We are excited to launch this new venture in partnership with Urbina S.A., who have a global reputation for their manufacturing expertise and are an acknowledged leader in the European construction industry.” “We see this joint venture as an opportunity for us to expand our portfolio and benefit from European manufacturing know-how, and we are committed to work closely with Urbina to leverage our combined strengths to cater to the rising demand for scaffolding materials in the Middle East,” Mr Al Marri added. Arkan Building Materials PJSC is a public joint stock company based in Abu Dhabi, UAE. A government-controlled industrial development company, Arkan Building Materials PJSC focuses on the building materials sector and is a leading supplier of cement and other construction products in the UAE. Arkan is developing an industrial complex covering 15 square kilometers near Al Ain which will be devoted to manufacturing building materials. Urbina SA is a multinational company based in Spain with over 50 years’ experience in supplying construction equipment, paint and related products. As well as the joint venture ARKAN URBINA LLC in Abu Dhabi, Urbina also operates in Spain, Brazil, Morocco, Mexico, Colombia and Romania, and is regarded as one of the most innovative developers of scaffolding systems in the world. Urbina’s high technical standards enable it to manufacture competitively priced, high quality products that fully comply with European standards.

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