Abu Dhabi: Senaat, an Abu Dhabi-based government firm has joined hands with Japanese steel makers to launch Al Gharbia Pipe Company at an investment of Dh1.1 billion, the company announced on Wednesday.
Al Gharbia will be based in Khalifa Industrial Zone of Abu Dhabi and will start production in 2018.
Jamal Salem Al Daheri, chief operations officer of Senaat, said the production capacity of the company will be 240,000 tonnes annually, 40 per cent of which will be exported to neighbouring countries.
“There is a lot of requirement for sour grade steel pipes in the oil and gas sector. We will be manufacturing high-quality products to supply the local market and export to the GCC [Gulf Cooperation Council] and other countries,” Al Daheri said.
“We launched the company with a long term vision and having a good understanding of the supply and demand situation. Middle East imports one million tonnes of steel pipes annually,” he said when asked about oil price fluctuations and its impact.
Al Gharbia is a joint venture with a consortium consisting of two Japanese companies including JFE Steel Corporation and Marubeni-Itochu Steel Inc (Misi), with Senaat being the major stakeholder. The Japanese consortium holds a 49 per cent stake.
Commenting on the new project, Takafumi Nishiuma, vice-president of JFE steel, said the GCC region is highly competitive in terms of drilling costs and oil and gas reserves capacity.
“With the development and production of oil and gas forecast to remain robust across the region despite recent volatility, the demand for high-quality steel pipes for pipelines to transport these resources is expected to expand steadily,” he said.
Senaat, a fully-owned company of the Abu Dhabi government, manages more than Dh26.6 billion in industrial assets and employs more than 15,000 people. Its portfolio consist of Emirates Steel, National Petroleum Construction Company (NPCC), Arkan, Ducab, Agthia, Al Foah and Taweelah Aluminium Extrusion Company.
The company has invested more than Dh15 billion in the last four years and plans to invest Dh5 billion in the next two years in developing industrial projects. It is also considering an initial public offering (IPO) of one of its units this year.
