Qatar Steel to rebuild plant in Jebel Ali to raise capacity

 Marketing Director Mohammed Ahmed Al Sa’adi said the new plant will increase capacity to 600,000 tonnes per year.

He said the factory will produce 300,000 tonnes of steel rolls and 300,000 tonnes of reinforcement steel.

QSC bought the plant from an investment group in 2001 and recently closed it down to make way for the new factory.

“The increase in demand for steel in the UAE and the region has prompted QSC to renovate its factory at a cost equal to the purchase price,” Al Sa’adi told Emirates Business in an exclusive interview.

He said QSC’s steel plant in Qatar was the region’s largest.

After it opened in 1987, production increased from 350,000 tonnes to 1.5 million tonnes in 2007. It was the Gulf’s first integrated steel production plant and made a profit of more than Dh1 billion last year.

There are 14 steel factories in the Gulf – five in the UAE, five in Saudi Arabia, two in Oman, one in Qatar and one in Bahrain.

They produce a total of about 14 million tonnes of steel, which accounts for 70 per cent of the steel used by GCC countries. The remaining 30 per cent is imported from Turkey, which has taken the place of China as the supplier. China has dropped from the list as most of the steel it produces is consumed by its own industries.

Al Sa’adi said steel prices in the Gulf have risen by 70 per cent in the past two years due to the increase in the cost of raw materials.

“Steel prices in Oman are the highest in the Middle East and they are also high in Egypt. I do not expect the price of steel in particular and building materials in general to fall in the GCC – they will remain high at least for the next 10 years.

“Prices will increase more in the UAE and Qatar since they are seeing the highest growth rates in the real estate and contracting sectors.” He said the region’s steel plants are divided into two types.
 
The first, integrated ones, convert iron into steel and carry out all manufacturing operations – there are fewer of these but they record higher profits. The second category uses steel plates to manufacture goods and make lower profits due to the high cost of production.

Al Sa’adi said he expects the real estate boom in the Gulf to continue. He said Qatar needs 300,000 residential units, Abu Dhabi 300,000 and Saudi Arabia two million due to population increase and the rising number of foreign workers.

The boom would be further driven by the high rate of growth in GCC countries – particularly Qatar with 14 per cent and the UAE with 11 per cent – and the soaring price of oil.

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