Abu Dhabi’s Emirates Steel Industries (ESI) is reviewing its plans to build a $1bn steel plate project at Taweelah in the north of the emirate and is instead looking at an alternative location closer its main production complex at Abu Dhabi Industrial City in Mussafah.

Planned GCC steel plants
Plant Capacity (million t/y) Country
Shadeed Iron & Steel 1.5 Oman
Hidd steel mill 4 Bahrain
Jizan steel plant 1.5 Saudi Arabia
Emirates steel phase III 1.4 Abu Dhabi
t/y=Tonnes a year. Source: MEED

The proposed third-phase expansion of the company’s facilities, which will involve the construction of a flat product plant with a capacity of 1.2-1.3 million tonnes a year (t/y) of steel plate, may still be at a different location to ESI’s main site at Mussafah, a source close to the project tells MEED.

“Taweelah is gone but this does not mean automatically that [ESI] will expand at the existing site,” the source says.  “Abu Dhabi is currently building additional industrial cities in its western region so [the plant] could be based there.”

Bidding is set to be competitive for the technology and engineering, procurement and construction (EPC) contracts for the facility, the source adds.  

“ESI is talking to a number of potential bidders,” the source says, adding that the bidders are likely to include Italy’s Danieli, Germany’s SMS Meer and Austria’s Siemens.

MEED reported in April that SMS Meer planned to bid for the contract with South Korea’s Samsung Engineering as its EPC partner while Danieli will bid alone as it has its own construction arm (MEED 09:04:10).

Sources indicate that Siemens is considering forming a partnership with South Korea’s Hyundai Heavy Industries as its EPC contractor of choice, although both firms declined to comment on a potential link-up.

Danieli is currently building the second-phase expansion of ESI’s complex. Its contract includes the construction of a heavy section mill producing 1 million t/y of large size sections, beams, columns and sheet piles.

ESI’s third phase of production was originally planned to be the Shadeed iron and steel plant in Oman, but the company was beaten in the race to buy the facility from Abu Dhabi’s Al-Ghaith Holdings by India’s Jindal Group.  

ESI is owned by Abu Dhabi’s state-controlled General Holding Corporation through Abu Dhabi Basic Industries Corporation (Adbic). Emirates Steel Industries has launched long-term project financing of between $1.3bn and $1.5bn for the expansion.

In a statement on 28 June ESI said: “Emirates Steel is in the process of assessing and reviewing its business strategy and objectives for further expansion. The company, however, is looking at various options for future growth including potential Greenfield investment opportunities and acquisitions. Emirates Steel also remains committed to a capital investment of AED 9 billion (US$2.45 billion) in its Phase 1 and Phase 2 expansion projects to increase its production to 3 million metric tons by early 2011”.