Emirates Steel and unknown Indian company make rival approaches for Omani plant
The Abu Dhabi-based owners of a new steel plant in Oman have been approached by two companies, one from the UAE and another from India, interested in buying the facility.
Owned by Al-Ghaith Holding (AGH), Shadeed Iron & Steel (Shadeed) is a 1.5 million tonnes-a-year (t/y) steel plant located at Sohar Industrial Port in the Batinah region of the sultanate.
Emirates Steel Industries (ESI), a subsidiary of the state-owned Abu Dhabi Basic Industries Corporation (Adbic), is believed to have been in talks with AGH for some time and has made a firm offer for the $750m plant.
“I can confirm that Emirates Steel has completed studies and made an offer to the chairman,” a source says. “But I don’t know whether or not the board of directors [have] accepted.”
The source could also confirm that an unknown Indian company has expressed an interest in the plant.
“An Indian company has made an approach. I am not sure whether or not they have made an offer, but they have definitely approached,” the source adds.
Industry speculation that the Indian steel manufacturer in question was the Jindal Group was denied by the company.
“We have no plans for Oman,” a Jindal spokesman told MEED.
No indication has been made as to what the value of ESI’s offer is, but an industry insider has told MEED that AGH is holding out for the highest possible return on its investment.
“The [Shadeed] plant is in a prime location and the facilities are excellent so I am not surprised they [ESI] are interested,” the insider says.
“The owner is willing to sell, but I have heard that the [asking] price is high, higher than the market rate,” he adds. “That’s why there has been no deal struck yet. I don’t know the price Emirates Steel wants to pay, but they are looking at the margin.”
Commissioning has now started at the plant and the first phase is due to be completed shortly with full start-up expected for the third quarter of 2010.
The Shadeed plant is split into three phases and will have a capacity of 4 million t/y when completed. Future plans for the site include a seamless tube mill to manufacture seamless tubes, sections and bars for Middle East market.