ESI revenue grows 135% to Dh3b

Abu Dhabi: Emirates Steel Industries (ESI) yesterday reported a 135 per cent jump in third-quarter revenue to Dh3 billion, up from Dh1.3 billion for the same period last year.

"Total production for ESI to the end of the third quarter of this year reached approximately 770,000 tonnes, compared to 540,000 tonnes in the same period last year, a growth of 43 per cent in production," chairman Hussain Al Nowais said in a statement.

The ESI commissioned the rolling mills included in its first phase of expansion to meet growing demand for iron and steel in local and regional markets, and has increased its production capacity to 1.8 million tonnes annually.

According to Al Nowais, the numbers are expected to grow, in light of the real estate sector boom in the UAE, particularly in Abu Dhabi.

"Our technical teams, among them highly trained Emirati technical experts, managed the routine maintenance and connection between old and new production lines in record time, quickly resuming production after only a temporary suspension last month," he said.

Al Nowais, who is also the chairman of Abu Dhabi Basic Industries Corporation, which took ownership of the ESI two years ago, explained that the ESI continues to forge ahead with its Dh16.6 billion expansion plans to increase production.

"We are on target in terms of our expansion strategy, developed in parallel with the Abu Dhabi Government's vision for the future and in accordance with Abu Dhabi Plan 2030, and believe that demand for steel will continue to grow. Our aim is for ESI to be ranked No 1 in the industry throughout the Gulf," he said.

Contracts

Saeed Al Romaithi, assistant vice-president of operations at the ESI, said: "The ESI signed contracts last year with four international companies, including the Brazilian company Vale, to secure our raw materials."

He also added that the company's expansion plans include increasing the div-ersification of production of steel products, expanding beyond the production of reinforced rebar to include other types of products such as wire rod, sections and metal coil.

Al Romaithi added that over the next four years the ESI factories will comprise an integrated industrial complex, unique to the region.

The ESI recently completed a jetty with a capacity of up to approximately five million tonnes annually, to deliver raw materials for steel production.

The company has begun the initial testing of the primary smelting unit and furnaces, and expects actual steel production to begin next January. The unit will have a capacity of about 1.4 million tonnes per year.

The unit will produce steel billets, the raw material for rolling mills, in turn reducing production costs by up to 40 per cent, as well as reducing the company's reliance on imported materials.

This will help to further stabilise output and increase the company's ability to control prices.

The number of Emirati employees at the ESI grew to 22 per cent in 2008, in comparison to just four per cent at the end of last year.