The prolonged takeover of the Shadeed Iron and Steel Company in Oman by India’s Jindal has proved that building, owning and operating a steel plant in the sultanate is not simple.
The India/Oman joint venture Zoom Steel Company plans to build a 1.2 million tonnes-a-steel plant. What makes Zoom different to its competitors is it will not be affected by the usual problems of gas allocations, funding or delays due to half of the equipment being missing.
Zoom’s decision to import its raw material, direct reduced iron (DRI), to make its steel billets and blooms means that the first phase only requires a power allocation and does not need gas. Not requiring gas is a major advantage in a country where gas supplies are limited.
Sur in eastern Oman has allocated land and 300 MW of power for the project and the construction of a temporary jetty will enable the company to transport DRI straight to the factory gates.
Oman does need more steel billets and it is estimated that it has a shortfall of around 200,000 t/y. The good news for the sultanate’s steel consumers is that shortfall will be met when the plants being built by Zoom and Shadeed start operating.
One problem for the new producers is that steel consumption in the sultanate is only 1.7 million t/y, so both Zoom and Shadeed, with capacities well more than 1 million t/y, will have to look to the export market.
For Oman, which has been trying to cultivate its steel industry for years, it now seems that the country is finally starting to realise its goals. For other companies looking to enter the market, moving to places such as Sur where power is available and importing raw materials is an intelligent strategy.
The secret to success in Oman is pretty simple – you can build any factory you like so long as it does not need gas.