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Who Are Mubadala & What Is Their Role In Malaysia?

posted Jun 22, 2011, 6:05 PM by dave CT Print   [ updated Jun 22, 2011, 6:22 PM by CT Print ]

In 2002, Mubadala - the Arabic word for ‘exchange’ - was established by the Government of Abu Dhabi, with a mandate to facilitate the diversification of Abu Dhabi’s economy.

Mubadala’s focus is on managing long-term, capital-intensive investments that deliver strong financial returns and tangible social benefits for the Emirate.

 The principles that underpin Mubadala’s mandate and guide their business strategy differentiate them from other investment organizations. while their investments have to be commercially viable, generating sustainable profits over the long-term, they also have to deliver strong social returns to Abu Dhabi and the United Arab Emirates.

Their partnerships with world class industry leaders underpin those principles; bringing the knowledge, expertise and technical skills that the Emirate needs to build a balanced and sustainable economy.

New, knowledge-based industries are also bringing high value employment opportunities to the United Arab Emirates, encouraging foreign direct investment and providing them with access to new global markets, both now and in the future.

Based on the principles laid out in the Government’s Policy Agenda 2007, the Abu Dhabi Economic Vision 2030 is a roadmap for the Emirate’s economic progress.

In 2006, His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Chairman of the Executive Council, mandated the General Secretariat of the Executive Council, the Abu Dhabi Council for Economic Development and the Department of Planning and Economy to develop a long-term economic vision for the Emirate.

This mandate was given in order to deliver upon the vision of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, Ruler of Abu Dhabi, for the ongoing economic success of Abu Dhabi.

The expectation was the creation of a long-term roadmap for economic progress for the Emirate through the establishment of a common framework aligning all policies and plans and fully engaging the private sector in their implementation.

The initiative builds upon the foundations set by the Abu Dhabi Policy Agenda 2007/2008 and was produced by a taskforce joining stakeholders from the public sector and private sector. The taskforce received extensive expert support from internationally renowned institutions. This taskforce was mandated with two key tasks:

To conduct an exhaustive assessment of the key enablers for economic growth.

To create a comprehensive long-term economic vision, with explicit targets, to guide the evolution of the Abu Dhabi economy through to the year 2030.

Mubadala’s areas of interest are:

Mubadala Aerospace

Which is helping to establish Abu Dhabi as a global aerospace hub, a cornerstone of the Emirate’s economic diversification strategy, through long-term, capital intensive investments.

Their integrated approach to the aerospace sector encompasses comprehensive manufacturing through to Maintenance Repair Overhaul (MRO) services.

They have entered into collaboration agreements with world-class aerospace and aviation companies to leverage the expertise necessary for a high tech, end-to-end technology and manufacturing base that offers both state-of-the-art facilities and a global reach.

Their integrated pilot training academy, underpinned by education, training, and R&D, is helping to develop the human capital and home-grown talent they need to ensure that a growing number of high-tech employment roles are filled by United Arab Emirate nationals.

Mubadala Capital

Serves as the primary vehicle for the company’s financial investing activities. Their investment strategy is based on value investing principles: they invest throughout the capital structure in a diversified portfolio of global public and private securities by capitalizing on market dislocations.  This approach is focused on the creation of long-term wealth and is biased towards capital preservation.

Mubadala Capital manages a number of existing investments including public market investments in AMD and GE, along with private investments in the Carlyle Group and the Related Companies.

They also manage Mubadala’s fund investment activities.

Mubadala Energy

Builds on Abu Dhabi’s rich heritage in oil and gas to pursue opportunities that will meet the Emirates current and future energy demands.

Their primary focus is on upstream oil and gas opportunities. They have been able to leverage the excellent commercial and governmental relationships they have established over the years, both to facilitate the expansion of their operations, and to build capability in new regions including MENA, Central and South East Asia.

Their assets in these regions have been complemented by their expansion into new territories, such as the Caspian Sea. They are also active in R&D in the renewable energy sector and in developing technologies that will facilitate the commercialization and widespread adoption of alternative energy sources.

On January 15, 2010, Mubadala oil & gas signed a development & production sharing agreement with Petroliam Nasional Berhad (PETRONAS). This came about after the Malaysian government awarded Mubadala Oil & Gas with block SK320, located offshore Sarawak.

Block SK320 covers over 2 kilometers and contains existing gas discoveries as well as a range of gas exploration potential.  Mubadala Oil & Gas will operate the block with 75% share in equity while PETRONAS will operate the other 25%.

This is Mubadala Oil & Gas’s first project in Malaysia, but not in the region.  Mubadala Oil & Gas has existing production and exploration activities in Indonesia, Thailand, Vietnam, and the Philippines as a result of acquiring Pearl Energy, a Singapore-based oil and gas company.  Development activities on SK320 will commence in 2010 and will span over a 5 year period.

Mubadala Healthcare

Plays an instrumental role in the creation of a thriving private healthcare sector for the Emirate. They establish long-term partnerships with renowned international medical institutions to build sustainable businesses, create regional capability, and stimulate the overall development of the sector.

Their first priority has been to address the region’s most pressing healthcare needs through the creation of specialist patient care facilities and ancillary services. In collaboration with organizations such as Johns Hopkins Medicine International, Imperial College London and Cleveland Clinic, they are bringing world-class clinical expertise to the region and reducing the need for nationals and residents to travel abroad for treatment.

Mubadala Industry

Pursues investment and development opportunities in those capital, energy or intellectual property-intensive sectors that can contribute to the wider diversification of Abu Dhabi’s economy.

They nurture primary and downstream businesses and support services in these sectors, while securing upstream resources.

They also extend to investing in the upstream and mid-stream metals and mining industry, with the objective of facilitating the creation of a cluster of metals-related businesses in Abu Dhabi. They are also supporting a growing requirement regionally for the provision of utilities and support services.

The strategic partnerships that they have formed with the governments and authorities in a number of countries in the MENA region have helped them facilitate a number of investments, particularly in power generation and water infrastructure, with a resulting positive social and commercial impact in those countries.

On 8 October 2010, Mubadala signed two collaboration agreements on a strategic partnership with 1Malaysia Development Berhad (1MDB) that will lead to significant increases in FDI in Malaysia.

The agreements had been signed with Mubadala Real Estate & Hospitality (MREH) and Mubadala Industry (MI). MI has agreed to assess the viability of an investment of up to seven billion United States dollars for the development of a major initiative in the aluminium sector based on hydro power in the Sarawak Corridor of Renewable Energy (SCORE).

The two state-owned companies are starting preliminary assessment work on the project, which will create more than 10,000 jobs during construction and another 2,000 specialist jobs.

MREH has agreed to collaborate with 1MDB to explore the potential joint development of key strategic projects within the Kuala Lumpur International Financial District (KLIFD), the 34.4 hectare development in Kuala Lumpur that is being led by 1MDB.  The full scope of MREH’s participation in projects to be located within the KLIFD will be finalized in 2011 following 1MDB’s completion of the KLIFD master plan.

KLIFD will provide a state-of-the-art home for world-class institutions operating in Malaysia’s financial system, including major international banking and financial institutions, financial services, investment houses and regulators.  KLIFD will further cement Malaysia’s position as a leader in global Islamic finance. It is a key component in Greater KL, which is identified as a National Key Economic Area (NKEA) to move Malaysia’s capital city up the value chain in the global economy.

Mubadala Information & Communications Technology (ICT)

Invests in and develops a portfolio of global ICT assets to bring industry-leading facilities to the region.

They actively manage these assets to ensure their sustainability, profitability and growth and to optimize their value to Mubadala and its partners over the long-term.

In anticipation of the sector’s potential for growth, they have structured ourselves to develop new projects, while managing existing assets in the three core areas of IT and technology, telecoms and satellite communications.

They are strengthening their relationships with global and regional operators and identifying other partners to help them capitalize on this growth.

Their aim is to establish a world-class cluster of ICT businesses in Abu Dhabi, creating high value employment opportunities and bringing expertise and knowledge to a sector that has been identified as important to the Emirate’s economic diversification.

Mubadala Infrastructure

Helps to deliver the supporting infrastructure essential to the economic transformation of the Emirate of Abu Dhabi. This is to ensure that the Emirate continues to run smoothly and that world-class education and healthcare infrastructure are in place to support a growing economy.

They are achieving this by entering into sophisticated Public Private Partnerships (PPPs) and by working with world-class partners. Together, they finance, build, own and operate state-of-the-art facilities in the United Arab Emirates, with major assets that include the UAE University, Paris-Sorbonne University, New York University and Tawam Hospital.

Their initiatives also allow for third party investment in other areas of their infrastructure, such as transportation. This collaboration is further serving to underpin the Emirate’s development into a well-organized and flourishing society.

Collectively, these investments remain true to the Mubadala mandate: generating positive social returns to the community by improving the quality of life and long-term financial growth.

Mubadala Real Estate & Hospitality (MREH)

Develops strategic commercial, residential and leisure districts that are central to Abu Dhabi’s long term development plans.

They are developing these landmark projects to international standards of quality, functionality and sustainability. A number of their landmark projects in the local hospitality sector are attracting some of the worlds’ leading hotel and leisure operators, who are vital to Abu Dhabi’s growing luxury tourism industry.

These key projects include Arzanah, a 1.4 million square meter residential and mixed-use community development; Sowwah Island, the heart of Abu Dhabi’s visionary new Central Business District; and the Mina Zayed Waterfront, a mixed-use leisure and entertainment district.

Mubadala Services Ventures

Develops and manages business in service-based industries which advance and support the diversification of the Abu Dhabi economy.

They focus on financial services and leasing; defense (non-aerospace); maritime transportation; and integrated logistics. These are sectors which directly enable the Emirate’s emerging, growth industries by providing added value solutions such as speed to market, economies of scale and greater operational efficiency.

They have stepped up their business development efforts with several new business-building opportunities, in partnership with leading global companies, which are at an advanced stage of commercial development.

These partnerships, and the transfer of skills and knowledge that result from them, support their efforts to create the home grown talent essential to a growing services sector and its long-term sustainability.

In line with this vision, on 1 June 2011, Mubadala held a workshop for the top two teams from F1 Racing in a schools challenge to aid their preparations before they represent the UAE at the World Championships in Malaysia in September.

In total, nine students, six from the first ranked team, ‘Team Red Shift’ (Dubai College), and three from ‘Revolution Racing’ (also from Dubai College),  met with Mubadala managers who gave them expert advice on branding and marketing, presentation skills, sponsorship and budget management, all important elements in determining the winner of the global competition.

Students also expressed their interest in pursuing Engineering in university.  As a result, Mubadala is taking the winning students to Al Ain to visit STRATA, Mubadala’s composite aerostructures manufacturing facility.

‘Team Red Shift’ will represent the UAE in the World Championships in Malaysia, while the runner-up, ‘Revolution Racing,’ will get the chance to form a special collaboration team with another school from Malaysia in order to participate in the same World Championships event.

Homaid Al Shemmari, Executive Director of Mubadala Aerospace and Patron of UAE F1 in schools, said: “Mubadala is proud to support the F1 in schools challenge and help the teams in their presentations at the World Championships later this year.  We strongly believe that competitions such as these, which expose our youth to various fields such as science, technology, engineering and business, will empower them to play an active role in the new industries Mubadala is helping to create in Abu Dhabi and the UAE.”

“At last year’s World Championships in Singapore, a collaboration team from the UAE and Australia finished second out of a total of 25 teams from 18 countries.  We are confident that this year’s representatives will perform equally well.”

In late April, 66 students across the UAE competed at the 2011 UAE F1 in schools competition.  As part of Mubadala’s commitment to developing the UAE’s youth, Mubadala set up a university advice desk, and distributed the 2011 F1 in schools notebook, a Mubadala produced user-guide to give each participant expert guidance on each element of the program.

Last year’s event was won by ‘Team Impulse,’ which went on to win the award for Best Sportsmanship in the World Championships in Singapore. The runner-up team in the UAE final formed a collaboration team with an Australian school and went on to take the award for Best Collaboration Team and finish second in the world overall.