Emirates Steel invites phase 3 bids

Emirates Steel is inviting bids for the third phase of its expansion project as it seeks to become one of the largest regional producers of the metal.

Emirates Steel hopes to increase its annual production further to 6 to 6.5 tonnes with the capacity expansion. Ryan Carter / The National

Emirates Steel is inviting bids for the third phase of its expansion project as the UAE aims to rival Saudi Arabia, the leading regional steel producer.

The development should create one of the largest integrated steel complexes in the Gulf by 2014.

"We are looking at real investment opportunities in the manufacturing of new products that will add to the company's competitive advantage and promote it to international standards," said Suhail Al Ameri, Emirates Steel's chairman. "We are certain that the projects we are currently implementing are feasible, in view of the development of various sectors in Abu Dhabi, and the determination of the Government to execute its development plans, which include mega projects in energy, oil and gas, petrochemicals and infrastructure."

Emirates Steel is a subsidiary of General Holding, which is fully owned by the Abu Dhabi Government, and was created in 2006 as a cornerstone of the emirate's drive to diversify its economy away from oil by expanding its industrial sector.

The company has already completed a Dh9 billion (US$2.45bn) two-phase expansion of its plant in the Industrial City of Abu Dhabi over five years.

The second phase will raise rolling output capacity to 3 million tonnes a year by December. In the same month, Emirates Steel aims to award the contracts for phase three.

Once complete, phase three will add capacity of 1.6 million tonnes per year by the middle of 2014. But Emirates Steel hopes to increase production further to 6 to 6.5 tonnes per annum.

Production would then rival the output of the region's biggest steel producer, Hadeed, a subsidiary of Saudi Basic Industries, known as Sabic. Hadeed produces about 6 million tonnes a year.

Phase three will involve building a steel-melting pot and a hot-rolled coil mill. It will primarily service GCC demand for hot-rolled coil, a material used in pipes, boilers and structural steel fabrication.

Another key part of Emirates Steel's goals is creating jobs in the emirate.

Once its expansion is complete, an estimated 2,000 more jobs will have been generated. Many of the posts will be taken by Emiratis, the company said. Through technical skills training, Emirates Steel has already ensured that 62 per cent of top administrative and operational jobs are handled by nationals.

"We succeeded in implementing the first two phases of the project relying on our national teams," said Mr Al Ameri.

The company could also make further strides in boosting its environmental credentials under phase three.

Continuous strip production to reduce energy usage and boost yields in the rolling process as well as scrapping preheating systems to cut electricity consumption are among the measures it is considering.

Emirates Steel has teamed up with Masdar, the emirate's clean-energy company, to create energy-efficient steel and aims to become the first major global steel producer to capture carbon dioxide on a mass scale.

Several leading global contractors had already expressed an interest in bidding for the third phase contract, Emirates Steel said.