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Arab Steel Sector Sees Smooth Road Ahead
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The steel industry worldwide has been on a roller-coaster ride in the past
few years but with prices looking up, the industry is in for better times.
In fact, the iron and steel industry in the Arab world, too, is facing
trying times. As one in the business for some 40 years, M. Adel El Danaf,
chairman, Metallurgical Industries, Cairo, Egypt, is well-positioned to
provide an insight into the industry, particularly in the Arab world.
Significantly, El Danaf is the president of the Arab Iron and Steel Union
based in Algiers, Algeria. The senior industry expert was in Abu Dhabi
last week for a symposium on the industry organized jointly by the Arab
Iron and Steel Union and the Abu Dhabi-based Emirates Iron and Steel
Factory. The symposium was held under the patronage of Sheikh Hamid bin
Zayed Al Nahyan, chairman, Abu Dhabi Economic Department, which saw
delegates from various countries who actively participated in the
discussions over three days. The symposium was rounded off with a visit to
the Emirates Iron and Steel Factory where El Danaf spoke to Gulf News.
Where does the Arab steel industry figure in the global steel industry?
The Arab steel industry is quite an important player in the global market.
There has been a marked growth in the last three years as
industrialization has started gathering pace. The producers in the Arab
countries not only cater domestically but they also export to countries in
the Arab world and outside. Generally speaking, the industry is doing well
and is projected to grow further in the next 5-10 years. Could you
substantiate your claims with figures? Yes. The total production in the
Arab countries is around 12 million tonnes per annum (mtpa). It is
expected to reach 21 mtpa by the year 2005 because there are many projects
currently under implementation and construction. The best growth has come
in the last three years when some steel plants in the Arab countries
undertook expansion. Much of the production goes into the local markets
but a portion (we do not have exact figures) goes into overseas markets
such as the Far East, Africa and even the European countries. As one of
the bigger producers in the Arab world, Egypt exports 250,000 tonnes per
year of iron and steel. Egypt is the largest producer in the Arab world
with a total production of 6 mtpa, followed by Saudi Arabia with 4mtpa.
Egypt is pushing to expand its total production capacity to about 10 mtpa
in the next three to four years. What are the problems or challenges
currently faced by the industry in the Arab world? I would say dumping is
one of the bigger problems faced by us in the industry. The steel industry
has certainly been affected by dumping, mainly from the ex-Soviet Union
countries, Turkey and a few others. The industry in our world has been
hurt by dumping steel at lower prices. For example, steel is sold at some
30-40 per cent lower than the prices in Commonwealth countries. We all
know the actual price of steel because it is published regularly in the
Steel Industry Bulletin. Is that the only headache for Arab steel
producers? Of course there are other issues. There are other barriers that
hinder the free flow of steel trade. Clearly, there is a need for
unification of specifications and all Arab countries must agree on one
specification as currently each country has its own specifications.
Moreover, customs duties vary from one country to another and it is
crucial to have unified customs duties in the Arab world. What is
important is to improve quality and be cost-effective because of the
severe competition. Arab producers must be bigger players in the
international market. What is the Arab Steel Union doing to improve the
industry's lot? We are trying our best to improve the lot of the industry
through regular interaction at meetings of producers and seminars where
industry leaders put forth their views and decide what measures must be
taken. We are trying to find the way to reach a coordination between
policies of various governments to act and remove barriers in the free
trade of steel. The Arab Steel Union is also making information available
to members on the current state of the industry, the opportunities, new
markets and similar information which can be of help to members. We are
working on ways and means to achieve greater coordination between
governments also to improve the lot of the steel industry. Tell us
something about the Arab Iron and Steel Union? This is an industry body
which has 85 member companies representing 15 Arab countries. The Union is
based in Algeria but we meet in different Arab locations. It is an
organization that comprises members of the iron and steel industry and
also related industries such as alloys, refractories and others. The union
helps member producers organize seminars, the latest example being this
symposium in Abu Dhabi where over 70 delegates from different countries
are sharing views on the industry, the trends and challenges of the
future. We had delegates even from outside the Arab countries such as
India attending the seminars. |
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Emirates Iron and Steel to boost output
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The $130 million Emirates Iron and Steel Factory is currently producing
250,000 tonnes per annum of steel reinforcing bars, but plans to double
production next year, officials said yesterday. Plans are on tap to export some 15 to 20 per cent of production to neighboring G.C.C markets. Sultan Al Zaabi, acting general manager of the General Industries Corp (GIC) owned factory told reporters at the plant yesterday that the design capacity of the plant, the largest such plant in the UAE, is 700,000 tpa. "Right now utilization of the plant capacity is around 70 per cent. But next year we expect production to go up to 500,000 tpa. In the coming years, depending on demand we will increase production to full design capacity," he said. The state-of-art plant with German technology commenced production in November 2001. It produces mainly steel reinforcing bars in sizes of 10 to 32 millimeters. Currently, the factory caters to the local market. "When we increase production we definitely have plans to export, mainly to neighboring G.C.C markets," said Al Zaabi, indicating that 15-20 per cent of the production could be exported. The billets (the raw material) for producing the reinforced bars are sourced from Turkey, Brazil, Egypt and Qatar. The finished product is used mainly for construction of buildings, bridges and similar projects. "There are smaller mills producing such products but Emirates Iron and Steel Factory is the largest producer in the country," claimed Al Zaabi. Emirates Iron & Steel Factory, in association with the Arab Iron and Steel Union organized a symposium in the capital under the patronage of Sheikh Hamid bin Zayed Al Nahyan, Chairman, Abu Dhabi Economic Department. Over 70 delegates from several countries attended the symposium which ran for three days. |
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