UAE-based BRC Arabia has broken ground on phase I of a new steel plant at the Dubai Industrial City (DI).

The new plant will produce around 150,000 tonnes-a-year of steel rebar, steel mesh and drawn wire. It will be built on the edge of DI, close to the Dubai-Abu Dhabi border. The construction contractor is the UAE’s Fujairah National Construction (FNC) and the completion date is April 2011.

“The new plant is similar to our current plant at Sharjah in that it will make the same products,” Joe Kenny, director at Murray & Roberts Steel International tells MEED. “However, we source a lot of raw materials from [the UAE’s] Emirates Steel Industries (ESI) and the new location cuts our transport costs and makes the potentially lucrative Abu Dhabi market viable.”

Negotiations are still being held with equipment suppliers, but Kenny confirms that all of the potential companies are European. It is believed that Italy’s Schnell is the frontrunner for the rebar and cut and bend equipment.

Phase I of the new plant will take BRC Arabia’s current total capacity to around 225,000-t/y with a potential phase II increasing that further to 300,000-t/y.

“The market will determine when we decide to build phase II, but I think it will happen in 2012 or 2013, Kenny says. “We are building the first phase in such a way that adding extra capacity will be a simple process that will not disrupt production.”  

The local Kanoo Group owns 51 per cent of BRC Arabia with South Africa’s Murray & Roberts owning the remaining 49 per cent. Steel rebar, steel mesh and drawn wire are all used in the construction industry.