Oman’s first melting shop, Modern Steel Mills, expects its local sales and export income to double this year, a senior company official said.

“Modern Steel recorded local sales of RO 818,000 ($2.12 million) and exports of RO2.95 million in 2002. This is expected to increase in 2003 by 100 per cent,” said chief commercial officer Lancelot D’Souza. The company’s steel products go only to the UAE

The plant was commissioned in November 2001 at the Rusayl Industrial Estate, 45km from Muscat, with an annual capacity of 90,000 tonnes per year. D’Souza said the plant had now reached its maximum utilisation and served a local demand of 25,000t per month out of a monthly production of 7,500t.

Modern Steel produces steel of 100mm x 100mm cross section and 5m to 6m length. It is capable of producing billets up to a cross section of 160mm x 160mm. Steel billets go into the manufacture of rebars, angles, channels and flats, among other items required in the construction sector.

The main facilities of Modern Steel consist of one electric arc furnace of 25t, one ladle refining furnace of 25t and one two-strand billet casting machine of six-metre radius suitable for casting 100sq mm to 160sq mm steel billets.

An Indian company has provided the plant and knowhow. The main raw material, mild steel scrap, is procured locally and from neighbouring countries
Chairman of the company is Dr Hammad bin Hamed Al Ghafri. The major shareholders are Ominvest (Oman International Development and Investment Company), Al Araimi Group, Assarain Group and Dharamsey Group.

D’Souza said there were no plans at the moment for expanding capacity.
“In the last one year there has been a revival in the steel industry in India as a result of which the demand for scrap has increased tremendously. India and Pakistan have increased their scrap procurement from the UAE and Oman markets and this has pushed prices up. That is why we do not have any expansion plans at the moment.”
But he said Modern Steel hoped to expand in the future to around 10,000 to 12,000t per month when it was sure about the availability of scrap.

“Around 20 per cent of hot briquetted steel may also be used as an alternative to scrap, he said. “There are a couple of companies which have plans to set up gas-based hot briquetted steel plants in the GCC. If these projects materialise we could go in for an expansion.”