Saudi Basic Industries Corporation (Sabic) plans to build two world-scale steel plants on either side of the Saudi Arabian coast. The plants will be built and operated by Sabic steel subsidiary, Hadeed.  

One of the plants will be constructed at Jubail in the Eastern province and have a capacity of 1.5 million tonnes a year, while the other will be located at Rabigh on the Red Sea coast and have a capacity of 1 million t/y.

The exact scope of either plant was not disclosed, but Sabic said in statement that the combined budget would be $4.23bn and that a gas allocation has been agreed with the oil ministry.  

The budgets and requirement for gas indicates that both plants will produce direct reduced iron (DRI) to produce billets and blooms. The majority of this production will then be used to create flat or long products for use in the construction sector.

Sabic also said that the plants will create a total of 2,500 jobs.

The decision to build the steel facilities comes after MEED reported in May that the local Al-Rajhi Steel’s proposed $3bn steel complex at the King Abdullah Economic City (KAEC) had been cancelled.

“The steel industry has been going through a lean period so this comes as welcome relief for the major players,” says a steel industry source. “Now it seems that you can’t get a steel plant built in the region unless a large proportion of your company is state-owned.”

Sabic is 70 per cent state-owned with the remaining 30 per cent traded on the Saudi stock exchange (Tadawul).