Dubai Investments Industries acquires stake in upcoming Saudi steel plant

Dubai: Dubai Investments Industries (DII), a wholly owned subsidiary of Dubai Investments PJSC, acquired a 10 per cent stake in Saudi Arabia-based South Steel Company set to become one of the largest steel plants in the Gulf region.

Promoted by Pan Kingdom Investments, the $350 million South Steel Company is scheduled to commence commercial operations from December 2010, with an initial capacity of one million tons per annum. The plant, being set up with technological assistance from Germany-based SMS Group, will produce top-quality steel billets and reinforcement bars in accordance with international standards.

Shukri Al Mehairi, General Manager of Dubai Investments Industries, said, "We are delighted to have acquired a stake in South Steel, which is poised to become a leading player in the regional steel market. DII has been actively looking to expand its regional footprint and broaden the scope of its investment activities, and this acquisition provides us with an opportunity to promote our strategic interests and gain significant traction within the rapidly growing Saudi market."

While the steel billets produced at South Steel Company will entirely be consumed within KSA and Gulf region, 15 per cent of the total output of reinforcement bars will be exported to Yemen and Sudan, with the rest consumed domestically. The plant is expected to achieve 100 per cent capacity utilization within the fifth year of operation.