User talk:JDF2879/SAFID

One of the articles referenced (Steel First) is behind a paywall. The full article is in the storage below. Please be aware of my COI – SAFID is my client as explained on my user page. HOgilvy (talk) 19:32, 1 January 2015 (UTC)

INTERVIEW: GCC GALVANIZED STEEL DEMAND DRIVING NEW PLANT INVESTMENT, UAE STEEL CEO SAYS

2 June 2014

UAE-based United Iron & Steel is building a 250,000-tpy steel galvanizing plant in Abu Dhabi to cater to strong demand for galvanized products in the Gulf Co-operation Council (GCC) countries.

"There is significant demand for [the] product in the region," United chairman Sheikh Mohammed Al Rahbani told Steel First in a recent interview. "We want to be a part of this market."

Once production begins in 2016, the plant is expected to sell 250,000 tpy of material. Some 20% of this will go to Al Rahbani's heating, ventilation and air conditioning company Safid, in Saudi Arabia, which is United's principal shareholder.

"We expect to see demand from the UAE, the wider GCC, Europe and Africa," Al Rahbani said, identifying the construction industry as a key driver of demand.

The GCC region currently imports about 70% of its galvanized steel. During 2013, the UAE imported more than 359,000 tonnes of galvanized coil, Saudi Arabia imported 255,000 tonnes and each country imported about 247,000 tonnes of pre-painted galvanized iron (PPGI), Al Rahbani said.

United signed the plant investment deal, worth 507 million dirhams ($138 million), in April this year with Abu Dhabi's industrial development body, ZonesCorp.

The plant will be built in Abu Dhabi's Khalifa Industrial Zone (KIZAD), and will process coil sourced from Saudi Arabia, Japan and South Korea.

Domestic advantage

Demand for all types of steel is growing in the GCC region and the wider Middle East-North Africa (Mena) region.

"Within the [Mena] region, per capita steel consumption is still low in some countries," Al Rahbani said. "We expect steel consumption to grow and, within that, flat steel will grow too."

Domestic production capacity is growing in response to this demand, and also because GCC nation governments want to diversify their economies, create jobs and reduce reliance on imports by localising industrial production.

Localising steel production also has advantages for steel consumers.

"Customers will no longer need to maintain large inventories, as we will provide high-quality materials with a minimum delivery time, out of a state-of-the-art production facility at highly competitive prices," Al Rahbani said.

United's main local competitor will be Abu Dhabi's Al Ghurair Iron & Steel, which has capacity to produce 200,000 tpy of hot dipped galvanized coil (HDG) and which installed a new skin-pass line in early 2014 to provide the coated steel market with 0.30-2.50mm thicknesses.

Energy supply

Steelmaking is an energy-intensive process and Abu Dhabi has the cost advantage of plentiful oil and gas reserves.

"Power and natural gas prices in Abu Dhabi are relatively low, and gas is in abundance. This cost leadership will definitely give us the advantage," Al Rahbani said.

Some steel enterprises have had problems securing gas allocations in the Mena region, but United has already secured the necessary gas allocation for this project, it said.

United expects to engage a building contractor in July this year, to finish construction by September 2015. Plans are now at "an advanced stage of approval from local authorities", Al Rahbani said.

It will produce 0.2-2mm cold rolled galvanized coils and 1.2-2.5mm hot rolled galvanized coils, in widths of 762-1,300mm. It will also produce regular spangle galvanized iron with coatings of 50-350g per sq m, and 0.2-1.2mm minispangle, skin-passed galvanized iron coils, for colour substrate application.

A PPGI colour coating line will be installed in 2016. United will then aim to double its galvanized steel production capacity from 2018, Al Rahbani said.

United Iron & Steel was founded in July 2013 as a joint venture between Al Rahbani's Saudi Arabian company Safid, the majority shareholder, and the UAE's AJ group of companies, which also owns Dubai-based aluminium and steel coil coater United Metal Coating (UMC).