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Emirates Steel volumes climb on Q3 2012
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Thursday, 06 Dec 2012
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Emirates Steel, which has undergone several expansions in recent years has reported 33% surge in steel volume and 10% increase in the dispatch of goods of prime quality through to the end of Q3 2012 YoY.

Mr Suhail M Al Ameri Emirates Steel's chairman and CEO of Senaat General Holding Company said that “Despite the challenging conditions faced in both our domestic and regional markets, the company has delivered a strong performance in the first Q3 delivering volumes which were underpinned by the excellent performance of our Phase 1 assets and the continuing ramp up of our Phase 2 steel manufacturing plants."

Mr Al Ameri said that “The expansion plans of Emirates Steel are in line with the government's long-term initiatives to develop and diversify the emirate's economy. The plants we have commissioned are delivering operational results ahead of expectations, supporting our contribution to the broadening of the emirate's GDP and creating high-quality job opportunities for UAE nationals."

Mr Saeed G Al Romaithi CEO of Emirates Steel said that 95% of the company's finished products were produced from its own manufactured steel against 83% to the end of Q3 in 2011. Increased volumes of own manufactured steel have enabled us to remain competitive in the context of the threat of low cost imported materials. According to figures released by the company, rebar production increased by 10% in the 9 months compared to the same period in 2011 and the output of wire rod increased by 4%. Steel production increased by 33% and the production of direct reduced iron DRI went up 20%.

Mr Al Romaithi said that "These figures reflect significant increases in our production and sales volumes. The construction sector is the primary consumer of our rebar and wire rod products. Our objective is to be one of the leading regional companies in steel making. The company sells around 70% of its finished products in local markets while the balance is exported.”

He believes that construction projects in the GCC region will be the key driver supporting the steel industry's growth in the near term, followed by oil and gas, petrochemicals and other infrastructure projects. Although some stability is returning to the GCC's construction sector, we believe that infrastructure projects will accelerate the region's recovery over the next few years. Being the largest integrated steel producer in the UAE, Emirates Steel's increase in its domestic market share to 60% has been achieved through targeted efforts to support key customers and by pursuing sales policies that assist in bringing stability to the market.

As well as focusing on the domestic market, the company has made sustained efforts to increase its exports to the regional markets, achieving a year on year increase of 30 per cent in export volumes, its most significant export markets being the GCC states. The first nine months of 2012 have been an exciting period with the company progressing the hot commissioning of the first heavy sections mill in the region. The commissioning is ahead of plan and it is already marketing its new products, and the feedback from its new customers, including steel stockists and fabricators, is positive. This is the latest achievement in the expansion of the company's integrated steel complex in Musaffah and this step has extended the product range to include large size sections, beams, columns, angles and sheet pile materials.

Emirates Steel, owned by Senaat General Holding Company, is strategically located in the Industrial City of Abu Dhabi some 35 kilometers away from the heart of the city of Abu Dhabi, it is the only integrated steel plant in the UAE, utilizing the latest rolling mill technology to produce reinforcing bar wire rod and heavy sections. Established in 1998, Emirates Steel is currently implementing a comprehensive business development plan. Once complete, the company will be one of the largest and most competitive steel producers in the GCC region.

It is evolving from its roots of being a simple and relatively low value added processor of steel into a sophisticated, highly productive manufacturing business with a high added-value business model. Furthermore, it will be among the few regional steel producers with a diversified product range, including rebar in straight and coil form, wire rod, sections, hot rolled coil and semi-finished products such as billets and direct reduced iron.

Source - Equities.com

(www.steelguru.com)

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