A heavy mill completes ESI's expansion programme, leaving the company well placed to profit from buoyant regional demand.
Emirates Steel completes $650m plant
Emirates Steel is seeking to cash in on a construction boom across the region and an increase in demand for oil and gas infrastructure with the completion of a Dh2.4 billion (US$650 million) mill to make giant girders, beams and pilings.
The company launched a $2.45 bn expansion programme in January 2006, and its first phase was completed in the middle of 2009. Emirates Steel is now able to produce 2.8 million tonnes a year of steel, and 3.2 million tonnes a year of iron.
"Now that Phase 2B is complete, we will be the only producer of jumbo and heavy sections in the Middle East and North Africa region," said Suhail Al Ameri, the chairman of Emirates Steel.
The growth in capacity to date has not been sufficient to meet domestic demand for steel. Last year, UAE imports of steel grew by more than 15 per cent, according to analysts.
The new mill will enable the producer to tap healthy regional demand for large components. Emirates Steel estimates the need for heavy-section steel products in the GCC will double by 2015.
The use of steel declined last year in the wider region as the Arab Spring interrupted projects and construction activity.
But the World Steel Association expects a significant rise in demand this year.
"Boosted by high oil prices, steel use in the region is forecast to resume growth in 2012 at a rate of 8.7 per cent," said the association in an outlook report.
Analysts believe growth in sectors such as oil and gas, tourism, manufacturing and infrastructure will aid the construction sector in the future, presenting a huge opportunity for companies such as Emirates Steel.
Neighbouring Saudi Arabia has budgeted billions of dollars worth of infrastructure spending over the next five years, underlining its position as the biggest consumer of steel in the region.