DII takes 10% stake in Saudi firm

Dubai Investments Industries (DII), a wholly-owned subsidiary of Dubai Investments, acquired a 10-per cent stake in Saudi Arabia-based South Steel Company.

The value of the deal was not revealed.

The $350-million (Dh1,286m) South Steel Company, scheduled to begin operations from December 2010 with an initial capacity of one million tonnes a year, is promoted by Pan Kingdom Investments, DII said in a statement. The new company is set to become one of the largest steel plants in the Gulf.

The plant, being set up with technological assistance from Germany-based SMS Group, will produce top-quality steel billets and reinforcement bars in accordance with international standards.

While the steel billets produced at South Steel Company will entirely be consumed within KSA and the Gulf, 15 per cent of the total output of reinforcement bars will be exported to Yemen and Sudan, with the rest consumed domestically. The plant is expected to achieve 100 per cent capacity utilisation within the fifth year of operation.

Commenting on the acquisition, Shukri Al Mehairi, General Manager of DII, said: "DII has been actively looking to expand its regional footprint and broaden the scope of its investment activities, and this acquisition provides us with an opportunity to promote our strategic interests and gain significant traction within the rapidly growing Saudi market."

"Steel is among the fastest-growing industries today, and with construction activities proceeding apace across the Middle East and with the regional steel industry tipped to sustain its growth momentum through the next decade, demand for steel is expected to rise even further," Al Mehairi said.

DII is committed to boosting industrial development in local and regional markets, and targets both new and established industries. DII's portfolio of subsidiaries includes Globalpharma and Emirates Building Systems.

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