Austrians win major Hadeed jobs

05 November 2004
Austria's Voest Alpine Industrieanlagenbau (VAI) has won two contracts worth Eur 300 million ($383 million) to expand the flat production facilities at Jubail for Saudi Iron & Steel Company (Hadeed). Under the contracts, VAI will build the world's largest direct reduction iron (DRI) plant, with capacity of 1.75 million tonnes a year (t/y), and raise production at Hadeed's steel plant by 1.22 million t/y (MEED 15:10:04).

VAI won the contract to build the DRI plant against competition from Germany's Ferrostaal. It will use DRI technology from the US' Midrex. The DRI plant will use natural gas and dressed iron ore feedstock to produce metallised iron, which will then be processed in the steel plant, to be built by VAI in partnership with Germany's Siemens. Italy's Danieli & Companywas the only other bidder for the steel plant package.

In April, a team of VAI and Germany's SMS Demagwas selected to expand the flat product unit's hot strip mill to 2 million t/y from 800,000 t/y. A team of US-based Danieli Morgardshammarand Dywidag Saudi Arabiain May won the contract to build a new steel reinforcement bar and wire rod mill for Hadeed's long product's facility.

ANZ Investment Bankhas been appointed financial adviser on the expansion project and Norton Roseis legal adviser on a funding package likely to be worth $400 million-500 million. The facility will be completely covered by Germany's Hermes, Austria's OeKB and Italy's SACE.

The project is part of a larger scheme aimed at doubling Hadeed's flat products capacity to more than 2 million t/y and raising its long products capacity to 3 million t/y from 2.5 million t/y. Several other awards are awaited on the expansion programme, including the contract to install a paint coating line with capacity to handle 150,000 t/y of flat products (MEED 11:6:04).

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