The Kuwaiti/Japanese joint venture behind Bahrain’s $1.2bn Hidd Steel Mill project is planning to acquire a steel rolling mill in Saudi Arabia.
The acquisition will allow the company 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 Hidd Steel Mill in Bahrain is being constructed by United Steel Company (Sulb), a joint venture of the Bahrain-based United Steel Holding Company (Foulath) and Japan’s Yamato Kogyo Company.
Speaking at the Middle East Steel 2010 Sulb chairman and managing director Khalid al-Qadeeri said, “[Sulb] won the tender and we are in negotiations to acquire a rolling mill in Saudi Arabia. We are in the final stages of due diligence and confident that we will conclude the deal by November.
“The new facility will be added to Sulb and that means we will be producing everything from light to heavy sections. We will be the only steel company doing this,” he added.
The proposed phase 2 of the Hidd steel mill was intended to concentrate on light to medium sections of steel, but as the Saudi plant being acquired is already producing those products, the expansion is now on hold.
Al-Qadeeri declined to name the Saudi Arabian plant in question and how much it had cost. However, a source familiar with the acquisition told MEED that Saudi Arabia’s 450,000 tonnes-a-year United Gulf Steel (UGS) rolling mill located at Jubail was the facility being bought by Sulb.
“UGS makes a lot of sense for Sulb,” the source says. “It is an independent plant so has been having difficulties making a profit due to the high cost of importing its steel billets in to the kingdom.
“The whole offtake of the plant will go into the domestic market so there will be no problems on finding customers for its products.”
The UGS plant manufactures a range of products that includes equal angles, flat, round and square bars. Al-Qadeeri also said that billets will be supplied from the Hidd Steel Mill complex.
“The billets will be transported via barge from Bahrain to the new mill,” al-Qadeeri said.
Kuwait’s Gulf Investment Corporation (GIC) 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.