Emirates Steel adds 45% capacity as UAE sales jump

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Emirates Steel boosted its production levels by more than 45% for the first half of 2010 to retain profits and has seen domestic sales increase by 30% for the period.

The Abu Dhabi based state-owned company, which is the single largest integrated steel producer in the country, also increased its production of reinforced steel – or rebar - by 26% during the first half of the year, compared to the first six months of 2009. Output of wire rod went up by 283%.

Exports of these products more than doubled, the company added, selling into markets such as Jordan, Saudi Arabia, Kuwait, Oman, India, China and Pakistan. However, around 80% of its produce is sold locally.

“This is a significant increase considering the downturn in local and regional markets,” said Mr. Carl Andersson, SVP of Operations. “The construction sector is the primary consumer of our rebar and wire rod products,” he added.

“Our objective is to be one of the leading regional companies in steel making. To reach this goal, we are working hard to eliminate bottlenecks in production. Like most steel makers, we have to operate our facilities at full capacity to make a profit,” he pointed out.

Emirati steel suppliers have faced a difficult year overall through an ongoing slump in projects compared to a few years ago. Mr Goviat of Emirates Buildmat, part of Gulf Steel Industries, told ConstructionWeek that it has recently been selling steel into the market at a lower price than it had been procured.

Zamil Industries, the construction linked industrial manufacturer, has recently been testing the production of its second plant in Damman, Saudi Arabia, which will see production levels increase by 50% if successful.

Venkat A.N., vice president of sales at Emirates Steel, said the company has been able to increase market share substantially and has achieved around30 per cent increase in domestic sales volumes during the first half of the year, compared to the same period in 2009. “This has been achieved through targeted efforts to support our key customers and by pursuing sales policies that ensure market stability,” he said.

Juma Al Mansouri, AVP of sales, said he expected Emirates Steel to export more than 50% of its wire rod and coil products in 2011, with only 15% of rebar output leaving the country. “On the commissioning of the steel sections mill, during the first quarter of 2012, further export opportunities will be targeted,” he concluded.