Potential investors in the Middle East’s steel industry should not miss the golden opportunity to invest in steel companies and plants while growth is still strong overall.
Dr Hilal Hussain Al Tuwairqi chairman of the Arab Iron and Steel Union said in an extraordinary broadside against investment companies that have favoured other regions of the world that the Middle East had so many advantages that could and should be exploited.
Mr Al Tuwairqi said that “Saudi is expanding, Qatar is expanding, Bahrain is proceeding. This is your golden chance, to join hands and build steel factories all over the MENA region. I am wondering why you are not doing this, why you are not building steel factories in this region? Because it’s cheaper: the electricity is cheaper; the manpower is cheaper the location is excellent. What’s wrong?”
He said that the Gulf countries in particular are three hours from Africa, a few hours from the Arabian Sea to the Far East to complement the cheaper labor and utilities but that these countries put trillions into Western economies from importing steel that could be manufactured locally. The problem with potential investors, he said, lies with their mindset and that this dislocation between the Middle East and the rest of the world has wider social implications.
Mr Al Tuwairqi said that “You want us to remain traders import everything from your countries and not manufacture anything. That is worse than the atom bomb, the nuclear bomb. If we remain sending our youth to your countries to become educated, to see how you’re living when they come back and they don’t find jobs, their reaction is big.”
He said that the Gulf region has largely been an importer of steel and other metals, with Turkey a particularly strong player that has undercut local prices in certain markets. This is despite the swift development of steel plants in Saudi Arabia, UAE and Qatar which are usually cited as the three biggest markets and the aggressive expansion plans of companies such as Saudi Arabia’s Zamil Steel and UAE’s Emirates Steel.
Dr Al Tuwairqi said that regional companies would have priority when it comes to supplying steel needed for rebuilding Yemen and Iraq which potentially represents multi million dollar deals and would have access to local credit lines. I will accompany you and make sure that you people, when you invest, it is secure, regardless of the change of regime, and you are free to bring your money and take it out.
He said that and by the way, you don’t have to bring your money local government will give you up to 70% soft loan, to be repaid over 15 years. Commercial banks can give you the rest of it, so you can come with your equipment.
(Sourced from www.constructionweekonline.com)
