Having produced 2.9 million tonnes of steel in 2013, the UAE is a sizeable player in the regional steel industry in the Gulf, nearly satisfying its own local demand of about three million tonnes. Industrial output rose a whopping 19.5 per cent from 2.4 million tonnes in 2012, and forecasts for 2014 expect the production volume to grow at a similar pace.
Major players
There are six major steel producers in the UAE with an annual capacity of more than 500,000 tonnes each. The largest is Emirates Steel, followed by Conares, a privately held company; Hamriyah Steel, a Russian-UAE joint venture; Tiger Steel, part of Sharjah’s Tiger Group; Qatar Steel UAE, part of Industries Qatar; and Star Steel, part of Dubai’s Al Ghurair Group.
A few newcomers have also been looking to tap into the market recently, such as Austria’s Unger Steel, which runs a steel mill in Sharjah’s Hamriyah Free Zone on 30,000 square metres at a capacity of 50,000 tonnes a year, or US-based MMFX Steel with a special rebar production in Dubai.
Unger Steel is one of the top five steel construction companies in Europe and chose the UAE due to the “favourable general economic conditions offered to international investors from the industrial sector”, says Josef Unger, the CEO of Unger Steel.
“Our second plant in Sharjah complements the production site in Austria, and together we are producing some 70,000 tonnes of steel annually,” Unger says, adding that the location has been chosen as it enables the company to “provide steel to customers within a distance of 2,500 kilometres from Sharjah.”
Market leader Emirates Steel, the UAE’s largest integrated steel producer, has just kicked off the third phase of its plant expansion. Start of commercial production is anticipated in mid-2014, adding an additional production capacity of 1.6 million tonnes per annum.
Industrial output
Emirates Steel, a subsidiary of Abu Dhabi Basic Industries Corporation, represents the UAE capital’s main investment in steel production within the wider government plan to boost industrial output in line with the diversification plans for the economy as a whole.
“Steel production has been invaluable to the growth of non-oil-based gross domestic product, which further serves economic diversity,” Suhail Mubarak Al Ameri, Chairman of Emirates Steel, said when inaugurating the expansion.
In 2012, as per latest available figures, the company posted a 17.5 per cent rise in production and a 120 per cent rise in sales and has been expanding its production line with special products, such as reinforced steel for the nuclear reactor construction site in Al Barakah.
The company expects that some $4.3 trillion (around Dh15.7 trillion) worth of construction projects in the Middle East and North Africa will be the key driver supporting the steel industry’s growth between now and the year 2020, followed by oil and gas, petrochemicals and other infrastructure projects. The newly found stability in the construction sector is expected to accelerate the recovery over the next few years.
Conares, which produces around 750,000 million tonnes of different steel products annually, represents 15 per cent of the UAE steel market. Exporting to six main markets including Iraq, Australia, the US, Canada and Far East, its exports share to the GCC market represents 50 per cent. The company was established in 2001 and initially focused on steel trading, but then set up its own advanced manufacturing facility in the UAE in 2011. Conares manufactures tube and pipe products apart from supplying steel billets, slabs, hot-rolled coils, galvanised coils, sheets and a host of other industrial steel products to the UAE, Gulf and overseas markets.
Signs of growth
At the Big 5 industry show in Dubai last November, the company signed sales contracts worth $30 million, citing “positive environment” in the industry as compared to the previous year. The company’s CEO, Bharat Bhatia said at the show that Conares now plans to expand its capacity to one million tonnes annually, adding that he was “very hopeful on Expo 2020,” which in line with the recovery of the real estate industry and planned infrastructure projects, such as the UAE national railway as well as the nuclear power plant in Abu Dhabi, would boost the steel sector further.
Being such an important hub for steel production, the UAE, especially Dubai, is a sought-after destination for industry conferences, such as the Middle East Steel Conference, held every December; the Arab Steel Summit, held in October 2013; or SteelFab, held in January this year in Sharjah.
