Ice Cool

Tabreed's new CEO Jasim Thabet talks exclusively with UME

Jasim Thabet, Tabreed CEO.
Jasim Thabet, Tabreed CEO.

Tabreed’s new CEO Jasim Thabet talks with Adam Lane about his firm’s extensive district cooling reach

A large map of the UAE hangs on the wall of Jasim Thabet’s office in Abu Dhabi, marking the locations of 59 of Tabreed’s district cooling plants across the country. As he animatedly explains, this comfortably makes his company one of the biggest district cooling firms in the world.

“We’re a regional company, not a small, local company in Abu Dhabi. We have operations in Bahrain and Saudi Arabia, Oman and Qatar. In terms of refrigerated tonnage delivered to our clients, we have some impressive figures – even compared with other cooling companies. Regionally our connected capacity is over 745,000 RT, and in the UAE alone we have over 587,000 RT.”

Those hugely impressive figures account for some of the most iconic developments in the region. In the UAE alone, Tabreed is responsible for sites including all of the cooling on the red and green lines on the Dubai Metro, Etihad Towers in Abu Dhabi, the Sheikh Zayed Grand Mosque and Abu Dhabi National Exhibition Centre. A massive cooling plant in Dubai provides cooling to a range of buildings and hotels along Sheikh Zayed Road, whilst the firm provides cooling for shopping developments including Abu Dhabi’s Khalidiya Mall, Central Market and Marina Mall.

“Tabreed is the partner of choice when it comes to the main developers in Abu Dhabi – firms like Aldar and Sorouh for example. And if you go to Yas Island [in Abu Dhabi], you see that all primary projects are cooled by Tabreed.

Everything from Ferrari World, the Yas Marina Circuit and all of the hotels. Essentially, the whole island is district cooled – it’s a huge centralised cooling plant with a 50,000 RT capacity which cools everything. Tabreed is a one-stop solution there.”

In addition, the firm holds long-term government contracts, making it, for example, the main district cooling supplier for the UAE’s Armed Forces, and the go-to firm for universities’ cooling requirements.

“We’ve completed expanding the cooling plant at UAE University in Al Ain, which has increased capacity to over 18,000 RT, and we’re now looking at expanding other plants. We’re also exploring new projects with the government entities in the UAE, as well as with the real estate developers.”

Outside the UAE, the firm has a further six plants, including the Integrated District Cooling Plant on Qatar’s Pearl development, the world’s largest cooling plant. The facility has a capacity of a massive 130,000 RT and is run by Tabreed’s joint venture firm Qatar Cool.

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Recent success
Jasim Thabet joined Tabreed in August of last year, replacing Sujit Parhar to become the first Emirati CEO at the firm. Since then, he has overseen the firm’s announcement of consolidated Q3 2012 results showing a 29% rise in net profits and an increase in customer connections of nearly 18,000 RT.

“I’ve been with Tabreed since August, in theory. But I go back way before that. I’ve been working very closely with the ex-CEO and with the company for the last three years, driving the recapitalisation programme which was closed in April 2011. I was also working very closely on major projects such as the RTA in Dubai.”

Even with this past experience, coming in to head a large and successful business might have been an understandably daunting prospect, but Thabet says that the transition has been straightforward.

“Because I’d been so close to the business, when I joined in August I really hit the ground running so there weren’t any issues. I’d been very close to the management team and very close to the business. I also have the operational background – I’ve worked in utilities before – so this put me in a good position to take on the challenge.”

Thabet suggests that the most recent profit increases has been, in part, the consequence of coming close to the end of the firm’s build-up programme which has seen it expanding plant capacities at some key sites.

“If you look at our third quarter net profit increase, the strength has been dropping the operating costs, improving plant efficiency and completing our build-up. Now we’ve built all these plants, we are seeing the benefits from those revenues and those connections.”

Another facet of Tabreed’s competitive advantage, Thabet believes, is its ability to work under any of the different business models under which the district cooling industry operates. He says that, unlike an EPC contractor that will essentially just build a plant, Tabreed can work under a Build-Own-Operate or Build-Own-Transfer model.

“What distinguishes Tabreed is that we have over 65 plants – so we’ve built more than anyone in the region – and we have the expertise and the track record. Also, on the operations side, we have over 400 staff dedicated to Operations and Maintenance that are in-house experts– we don’t outsource labour.”

DC Benefits
Of course, the other side of the coin in terms of Tabreed’s success has been the ready market for cooling requirements, together with an increasing focus on energy efficiency.

“Cooling, here in the region, is a key critical infrastructure. You really can’t live without it and you need it almost all year round. So for any development that comes up, there will be a need for cooling; in particular, a need for efficient, cost-effective cooling. This is where Tabreed and district cooling fits in.”

“When you compare district cooling with the conventional cooling we have in the region, it’s much more efficient – almost 44% higher efficiency. If you consider that Abu Dhabi Water and Electricity Company (ADWEC) recently said Abu Dhabi’s summer electricity demand reached about 10GW.

In Abu Dhabi and the UAE, during July and August, cooling represents nearly 70% of this consumption. You can imagine then, that if you have a cooling method that is 44% more efficient, the savings to the government and customers are very significant,” he adds.

Thabet also emphasises the other consequent key benefits of district cooling – in terms of lower power requirements, reduced CO2 emissions and greater reliability. In addition, he points out the perhaps not so evident practical and aesthetic advantages.

“If you look at, for example, a high-rise hotel in Dubai; typically on the roof you have your chillers. If you have district cooling, you have all this space you can use – for a swimming pool or tennis court, whatever. There is also less noise pollution, as you have the plant further from your prime location, and you can also disguise a plant to blend it in nicely with other buildings.”

Whilst some commentators in the region have suggested that district cooling has not yet been adopted as widely as it could, Thabet believes that the technology is achieving its potential.

“However, we need to be realistic and pragmatic when we are dealing with district cooling. It is not a one-stop solution for everyone’s needs. If you have low-rise, low-density buildings, it doesn’t make sense to have district cooling. You really need high-density development in a condensed area for a centralised cooling plant to really make sense.”

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A natural question to ask any incoming CEO is whether there is a plan to change the focus and direction of the firm. This is especially intriguing with a company such as Tabreed, where the business was recording continuous success right up to the new appointment.

Indeed just a few days prior to Thabet’s entry, the firm announced a 25% increase in net profits through the first half of last year. Unsurprisingly then, Thabet says that the future focus will stay very much on the company’s central business.

“The strategy is to remain focused on the core chilled water business and to complete the build-up programme. We’ve almost finished the build-up – with the green line and with the UAE University expansion project – so our focus will be chilled water and less on the value chain businesses we have.

"We have some manufacturing and contracting subsidiaries, but we’ll be concentrating on building the plants, connecting the plants; as well as looking to expand and grow the government entities. So with the UAE Armed Forces, with the Abu Dhabi police, the universities and the hospitals. That’s the focus.”

Perhaps not unexpected given the region’s evident and rising cooling requirements, Thabet says that his firm isn’t looking to increase the number of countries it operates in.

“The key here is focus. Locally, in the UAE, and with our next-door neighbours in the region. We can penetrate the market.”

“Our strength and our growth has mainly come from Abu Dhabi and Dubai in the past; and we continue to be particularly strong in Abu Dhabi – because Abu Dhabi is growing – so that’s where we are strong. But we are also focusing on Qatar and Saudi Arabia, because there is good potential in both. In Saudi Arabia there is a lot of scope for expansion, and power and water are key for them, so they are always looking at ways to improve efficiencies. There is a huge demand for power, so district cooling really makes sense for them,” he says.

Thabet says that Tabreed’s approach to project rests first and foremost on collaborating closely with the developer of a project.

“It’s key that we get engaged very early on with the developer, in the early stages of design. We then ensure that we have a commercial contract and then there needs to be an emphasis on ensuring we build the best and most cost-effective plant we can for that particular developer. That’s done by ensuring that we go through a very rigid and solid procurement process. But the absolute key is early engagement with the developer, so that we can cooperate with the designer on district cooling in his master development.”

The technology involved in the cooling process is also an important part of each project, and whilst Thabet readily concedes that district cooling technology is not as cutting-edge as other industries, he suggests that advancements in efficiency gains are continuously being investigated.

“District cooling is not going to be as high-tech, relatively, as the semi-conductor field for example. It’s more industrial – like a power plant. At the same time, we do continue to evaluate our technologies to ensure that we are providing the optimal cost-effective solution to our partners.

“We are looking at ways to improve efficiencies in power and water by using technology such as frequency drivers and thermal storage, and we are looking at collaborating with an R&D partner.”

Making a prediction for the state of the market in five years, Thabet reiterates the basic formula for growth that is driving Tabreed’s impressive profit rises. Simply - being in a region where there is still economic growth and unbearable summer heat makes cooling a necessary and growing industry.

“In a region where temperatures go above 50 degrees Celsius, district cooling infrastructure is just essential. Wherever there is growth – and there is growth in the region; they’re still building schools, hospitals, universities etc. – there will be a need for cooling.

If you have the right building density, or a large-scale development, district cooling is absolutely the way to go. So there a lot of potential in district cooling,” he concludes.


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