UAE steel producers boost output on rising demand

Dubai - Leading local manufacturers like Emirates Steel and Conares are optimistic that there is room for every one.

The UAE steel sector has been busy striking deals, expanding and looking forward to welcome 2016 with lot of optimism and this is despite the fluctuations in the construction market.
Leading local manufacturers like Emirates Steel and Conares are optimistic that there is room for every one. Bharat Bhatia, CEO of Conares, the second largest private steel manufacturer in the region, says that the number of upcoming projects has increased. For 2016, our market intelligence forecasts a growth in the number of tenders, supporting the World Expo 2020 to be hosted in Dubai.
Traders in the UAE are keen to buy from local manufacturers in order to save inventory cost and avoid risk of price fluctuations. Over the past few years, the UAE's steel industry has witnessed an upswing in the range of 5 to 15 per cent growth annually. Bhatia and other producers spoke to Khaleej Times on the sidelines of the Big 5 International Business and Construction Show 2015, which kicked off in Dubai on Monday.
"With the existing developments for the Expo 2020 and the plans envisioned under the Vision 2021, projects will be on track to be completed before the year 2020. This anticipates a growth in the industry by 30 per cent until the end of this decade, which will help local steel manufacturers cater the odd three to four million metric tonnes rebar demands for all these projects," said Bhatia.
"There are positive expectations on steel demand, which will grow substantially from 2016 onwards. This will have an additional growth of 10 per cent on a yearly basis from 2017." Conares manufactures 500,000 metric tonnes of steel rebars, and 250,000 metric tonnes of steel pipes annually; and is on the track to produce additional 250,000 metric tonnes as per the expansions being completed at its plant. Bhatia further said, "In line with our expansion plan, we are on track with the new pipe mill for 12 inch pipes. The foundations for the plant are complete. We expect trials by the end of this year, keeping us geared to deliver towards the end of Quarter 1 in 2016. In line to become a one million tonne steel manufacturer, we hope to achieve maximum utilisation of our production capacities."
"Keeping the vision of UAE and Dubai 2021, we expect multiplying our revenues to exceed Dh2 billion mark by the year 2017. In terms of facility growth, we are aligning Conares with the region's commitment to infrastructure developments. When it comes to investments, Conares is on track to invest in an additional Dh200 million in the next five years, from its existing capital investment of Dh900 million approximately. Once the process of plant expansion is completed, we intend to diversify our product portfolio, which is backed by future expansions. The Vision 2021 for Conares is crucial to make it a manufacturing powerhouse," he added.
Mohammed Salem Al Afari, vice-president, marketing, said: "Emirates steel has a capacity of 3.5 million tonnes per year and sells 63 per cent in local market with 36 per cent to overseas market. Currently the firm caters to export demands of 36 countries. The demand for local steel is strong and we expect increase of two per cent in rebars and this will keep surging till 2020 and then may slow down. There is room for everyone as demand is huge. Our current market share is 63 per cent and we expect it to surge to 70 per cent in 2016."
- sandhya@khaleejtimes.com