ATG moves ahead with steel plans

09 September 2005
Saudi Arabia's Al-Tuwairqi Group(ATG)is planning to invest more than $800 million on various new steel units throughout the federation. The largest project will be a steel complex in Sharjah's Hamriyah Free Zone. The plant is due to be operational by the first half of 2007. Covering an area of about 1.2 million square metres, the facility will initially comprise three elements: a profile factory for automatic fabrication and welding; a direct reduction iron (DRI) unit; and a steel meltshop with capacity of 1 million tonnes a year (t/y). Midrex Technologiesof the US is understood to be the favourite to supply the DRI technology.

Named ATG Steel, the plant will import pelletised iron ore which will then be put through the DRI process. The product will be fed with scrap metal to create billets varying in size. ATG is also planning to build a separate rolling mill, although the timing and location remain unclear. Work on the complex will be undertaken by ATG, but various specialised contracts will be issued for tender in early 2006. A consultant is also expected to be appointed imminently to carry out an environmental impact study.

The complex will require about 170 MW of power. The Hamriyah Free Zone Authority (HFZA) is considering setting up an independent power project (IPP) for the free zone, although ATG may opt to build a separate unit or turn to Sharjah Electricity & Water Authority (SEWA - see Power & Water). ATG is in negotiations with Sharjah-based Crescent Petroleumwith a view to concluding a 25-year concession agreement for the supply of natural gas.

ATG is also forging ahead with plans to develop new downstream facilities in Dubai. The company has selected a local contractor to build a new cut and bend plant in Dubai Investments Park. The Bishr Steel Industriesfacility will have a built-up area of about 40,000 square metres with eventual capacity reaching 300,000 t/y of cut and bend steel and 30,000 t/y of fabricated heavy steel. The plant is scheduled to be operational by the first quarter of 2006. The products will be used to provide rebar for the construction industry in Saudi Arabia.

The developments are the latest efforts by ATG to increase its steel manufacturing portfolio across the region. The company aims to raise its steel production to 5 million t/y from 3 million t/y by 2010. The group is building a DRI plant in Dammam and signed an agreement in late August to invest $200 million in a proposed steel mill near Karachi in Pakistan. ATG currently owns two billet plants, one hot rolling mill and one downstream facility for cut and bend, wire mesh and epoxy coating.

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