Hadeed decisions are nearing

15 October 2004
Saudi Iron & Steel Company (Hadeed)is gearing up to award two major expansion contracts worth about $500 million on Hadeed's flat products facility in Jubail by the end of October. Two companies are in the race for the contract to raise capacity at Hadeed's direct reduction iron (DRI) plant to 1.5 million tonnes a year (t/y). The bidders are Germany's Ferrostaal, which is offering the HYL DRI process from Mexico's Hylsa, and Austria's Voest Alpine Industrieanlagenbau (VAI), which is proposing technology from the US' Midrex.

Two companies are also pursuing a second expansion project at Hadeed, comprising the construction of a 1 million-t/y steel plant. VAI and Italy's Danieli & Companyare the bidders for the work.

Bankers are expecting the preliminary information memorandum (PIM) for the debt financing of Hadeed's expansion to be released soon after the contract awards. They say that export credits are likely to play an important role in the anticipated multi-tranche package.

Both projects are part of a larger scheme aimed at doubling the company's flat products capacity to 2 million t/y and to raise 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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