Emirates Steel boosts production by a third
95% of its finished products came from its own manufactured steel
Emirates Steel has announced an increase in its steel production volume by 33% through to the end of the third quarter, 2012, less than two months after the inauguration of its $1.9bn phase two expansion program.
Owned by Senaat GHC, the Abu Dhabi-based company has increased its dispatch of prime quality finished goods by 10% compared with the levels achieved in the same period of 2011.
“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 HE Engineer Suhail M Al Ameri, Emirates Steel’s chairman and CEO 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, supporting our contribution to the broadening of the Emirate’s GDP and creating high quality job opportunities for UAE Nationals,” he added.
Engineer Saeed G Al Romaithi, chief executive officer of Emirates Steel, said that 95% of the company’s finished products were produced from its own manufactured steel, against 83% to the end of Q3 in 2011.
“The increased volumes of own manufactured steel has enabled us to remain competitive in the context of the threat of low-cost imported materials,” he added.
According to the latest figures, rebar production increased by 10% in the nine months compared to the same period in 2011, and the output of wire rod increased by 4%. Steel production increased by 33%, and the production of direct reduced iron (DRI) went up by 20%.
“These figures reflect significant increases in our production and sales volumes,” said Al Romaithi. “The construction sector is the primary consumer of our rebar and wire rod products. Our objective is to be one of the leading regional companies in steel making.” Emirates Steel sells around 70% of its finished products in local markets, while the balance is exported.
Al Romaithi believes that construction projects in the GCC region will be the key driver supporting the steel industry’s growth in near term, followed by oil and gas, petrochemicals and other infrastructure projects.
“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,” he said.
Emirates Steel is the largest producer in the UAE, and the increase in its domestic market share to 60% has been achieved through targeted efforts to support key customers and by pursuing sales policies that assist in bringing stability to the market, Al Romaithi added.
As well as focusing on the domestic market, the company has made sustained efforts to increase its exports to the regional markets, achieving a year-on-year increase of 30% in export volumes, its most significant export markets being the GCC states.
During the first nine months of 2012, the company commissioned the first heavy sections mill in the region as part of its phase two expansion program.