Two of the largest steel producers in the GCC have said that there will be no greenfield projects for the near future as the industry moves towards greater consolidation and an emphasis on quality rather than capacity expansion.
Speaking at the Metal Bulletin Middle East Iron & Steel Conference in Dubai, executives from Emirates Steel Industries (ESI) and Saudi Basic Industries Corporation (Sabic) admitted that the large steel plants they were planning were still very much on hold.
Ismail Shar al-Sulby, general manager of long products at Sabic Metals, said his company was enhancing current facilities and growing its product portfolio. The company is now self-sufficient in billets after the full commissioning of an electric arc furnace at Jubail.
However, the two steel plants planned by Sabic for Saudi Arabia are set to remain on hold for the foreseeable future while feasibility studies are carried out.
|GCC steel projects on hold|
|Rabigh steel plant||Sabic||$1.7bn||Saudi Arabia|
|Jubail steel plant||Sabic||$2.5bn||Saudi Arabia|
|Phase 3 expansion||ESI||$1bn||UAE|
|Yanbu steel plant||Atoun Steel||$300m||Saudi Arabia|
|Sohar pelletising plant||Vale||$1bn||Oman|
|Source: MEED Projects|
MEED reported in July 2014 that the projects, with a combined capacity of 2.5 million tonnes a year (t/y) were on hold. One scheme is a Jubail-based plate mill with a capacity of 1.5 million t/y. The second planned project was a cold mill to be Rabigh on the Red Sea coast. The greenfield plant is aimed at providing raw materials for use in several downstream industries, including automotive and electrical.
Saeed al-Romaithi, CEO at ESI, said his company was also looking to forge greater ties with its customers by providing enhanced products and providing quality rather than looking to compete with exports. He stressed that a lack of gas allocations meant that there would be no greenfield building, indicating that the phase III expansion of ESIs facilities, would not be going ahead in the near future.
There is reluctance from the government to provide us with more gas for future projects, he said. However, if we see an acquisition opportunity that is attractive, we could move on that either regionally or internationally.
The Middle East Iron & Steel Conference is being held in Dubai on 9-10 December.