Dubai: Conares, the steel company, is going for a $25 million (Dh92 million) expansion at its manufacturing facility in Jebel Ali Free Zone. The aim is to expand its capacity for steel pipes and tubes, which would serve it both in the domestic market as well as explore export opportunities.

“Currently we have an installed capacity of 500,000 tonnes [a year] for steel bars, and another 250,000 tonnes for pipes and tubes,” said Bharat Bhatia, CEO. “With the new investments, we will add another 250,000 tonnes for pipes and bars, especially those in the 4- to 12-inch diameter. Our existing capacity for pipes is only in the 0.5- to 4-inch diameter.

“We have been seeing a lot of imports of 4-inch diameter and over pipes from India, China and Vietnam. We felt that creating the new capacity will help us get into the many infrastructure based projects that are being planned locally. Plus, it will give us a chance to deliver quickly whenever there’s a demand upturn. And any excess production can easily be supplied to the export markets.”

The new line is expected to be commissioned by the fourth quarter. It was in 2005 that Conares built the plant for a small diameter pipes and tubes, and later, in 2011, adding the capacity for steel bars.

Conares sells directly to the trade and not to project contractors. “That’s the way we have operated historically, and we only trade on cash or letters of credit,” said Bhatia. “We don’t offer credit periods and it is a system that has worked well for us. The traders take the risk when it comes to taking on stocks, and we will not create a situation of dealing directly with contractors and undermining our partners.”