A Kuwaiti/Japanese joint venture is close to completing the acquisition of the 450,000 tonne-a-year United Gulf Steel (UGS) rolling mill located at Jubail in Saudi Arabia.
The Bahrain-based United Steel Company (Sulb), a joint venture between Kuwait’s United Steel Holding Company (Foulath) and Japan’s Yamato Kogyo Company, are now in final negotiations for the plant.
|Middle East Steel Demand 2010|
|Total percentage of 43.92 million tonnes|
|Source: Metal Bulletin|
“We are on the verge of completing the zone agreements and completing the formalities with the banks so we are very happy,” says Sulb chairman and managing director Khalid al-Qadeeri. “Hopefully the deal will be concluded within a month or so I think.”
The UGS plant will allow Sulb to drop plans to build an additional plant in Bahrain and accelerate its timescale of delivering steel products from light to heavy sections by three years.
The UGS plant manufactures a range of products that includes equal angles, flat, round and square bars. Billets for the plant will be transported by barge from Sulb’s $1.2bn Hidd Steel Mill project currently under construction in Bahrain (MEED 15:10:10).
The new facility will allow Sulb to produce everything from light to heavy steel sections, making it the only steel producer in the region to do this.
Khadeeri also says that the Hidd Steel Mill project is on schedule despite the civil unrest that has been occurring in the kingdom.
“The project is ahead of schedule and will definitely be finished on time, which will be the last quarter of 2012,” he says. “Hopefully, projects like the Sulb mill will contribute to mitigating some of the concerns the citizens in Bahrain have about jobs and employment opportunities.”
Kuwait’s Gulf Investment Corporation owns 50 per cent of Foulath, 25 per cent is owned 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.