Foulath was set up in 2008 as the holding company for investments in the steel industry by Gulf Investment Corporation (GIC) and a number of strategic partners.

Anurag Bisaria, director for metals at GIC, said that engineering, procurement and construction (EPC) contracts should be awarded in the first quarter of 2009 for the 7 million-tonne-a-year (t/y) Oman Pelletising Company plant in Salalah.

Oman Pelletising Company is 51 per cent owned by Foulath and 40 per cent owned by an unidentified “leading international steel producer”, with which a joint venture agreement is due to be signed in October, Bisaria said. The remaining 9 per cent will be held by a strategic Omani shareholder.

The plant will target markets in India, Japan and the Far East. Bisaria said $700m will be invested in the plant.

EPC contracts should also be awarded in the first quarter of 2009 for two pelletising plants that Foulath is developing in Egypt, according to Bisaria.

The 7 million-t/y plant on the Red Sea coast near Sukhna and another 7 million-t/y plant in Alexandria will both be 25 per cent owned by Foulath and 25 per cent by the Kharafi Group of Kuwait.

The remaining 50 per cent will be held by unidentified strategic investors from the steel industry. The investment in each plant will be $700m.

EPC contracts should also be awarded at the end of 2008 for the Sulb project at Hidd in Bahrain, which is jointly owned by Foulath and Yamato Kogyo of Japan. Bids have been submitted by Japan’s Kobe Steel, Italy’s Danieli and Germany’s SMS Demag.

The complex comprises a direct reduction iron (DRI) plant with capacity of 1.5 million t/y, a 1.3 million t/y melt shop and two heavy section rolling mills: one with capacity of 600,000 t/y for heavy and medium sections and a second with identical capacity of light and medium sections.

Sulb will be supplied by phase two of the Gulf International Investment Company (GIIC) plant which is being constructed at Hidd in Bahrain.

GIIC is 100 per cent by Foulath. This will require 2.2 million tonnes of pellets a year. Bisaria said that the Bahrain government has approved plans to build a 350-MW power plant to supply Sulb.

Bisaria said that Sulb will involve investment of about $1.4bn. He said that a group of six structuring banks have been appointed to organise the financing which will be sourced from commercial banks, government institutions, export credit agencies and Islamic banks.

Bisaria said the original plan was to raise 70 per cent in the form of debt but this may have to be reduced to 60 per cent due to the credit squeeze.

Bisaria said Foulath has signed long-term supply contracts for a total of 28.5 million t/y of iron ore.

Foulath is 50 per cent owned by GIC, 25 per cent by Qatar Steel, 10 per cent each by the Kharafi Group of Kuwait and the National Industries Group of Kuwait and 5 per cent by the Kuwait Foundry Company.