Abu Dhabi-owned firm increases production by a third due to more projects in Dubai and a drive to boost infrastructure in wider GCC.
Emirates Steel boosts output as Dubai construction picks up
A recovery in the Dubai construction market and an increase in the number of infrastructure projects in the GCC prompted Emirates Steel to increase production by nearly a third in the first nine months of this year, the company said today.
The largest integrated steel producer in the UAE announced that steel production at the company’s plants at the Industrial City of Abu Dhabi had risen by 33 per cent in the year to 30 September compared with the same period in 2011.
The company - which is owned by Senaat, which is in turn wholly owned by the Abu Dhabi Government - said that production of steel-reinforced bars, commonly used in building materials as reinforced concrete, increased by 10 per cent during the same period.
The number of iron rods made by the factory increased by 4 per cent in the first nine months of this year and the amount of direct reduced iron, a key component in the manufacture of wrought iron, went up by 20 per cent.
Emirates Steel, which is able to produce 2.8 million tonnes a year of steel a year, and 3.2 million tonnes a year of iron, said that 95 per cent of the company’s finished products were produced from its own manufactured steel, compared with 83 per cent during the first nine months of 2011.
It added that it was currently selling around 70 per cent of its finished products to the domestic market while the remaining 30 per cent was exported, mostly to other GCC nations. It said that during the first nine months of the year it had increased its domestic market share to 60 per cent. The company also said it had increased export volumes by 30 per cent compared with the previous year.
“The construction sector is the primary consumer of our rebar and wire rod products,” said Saeed G Al Romaithi, chief executive of Emirates Steel. “These figures reflect significant increases in our production and sales volumes. Although some stability is returning to the GCC’s construction sector, we believe that infrastructure projects will accelerate the region’s recovery over the next few years."
Established in 1998, the company has been undergoing a Dh9bn expansion programme since 2006 aimed at making it one of the largest steel producers in the GCC region. A first phase was completed in 2009 and in January 2012 it announced it had completed a Dh2.4 billion mill to make giant girders, beams and pilings as part of its second phase of expansion.
“Despite the challenging conditions faced in both our domestic and regional markets, the company has delivered a strong performance in the first three quarters, delivering volumes which were underpinned by the excellent performance of our Phase 1 assets and the continuing ramp-up of our Phase 2 steel manufacturing plants,” said Suhail M Al Ameri, the company’s chairman and chief executive of Senaat GHC.
“The expansion plans of Emirates Steel are in line with the Government’s long-term initiatives to develop and diversify the Emirate’s economy. The plants we have commissioned are delivering operational results ahead of expectations,” he added.