United Gulf Steel (UGS), the only medium section structural steel mill in the GCC region, expects turnover to expand by 40 per cent during 2004 thanks to the improved global and regional construction steel markets.

“Production in 2003 was around 300,000 tonnes, double that of the previous year, and this year we’re targeting an output of 320,000 tonnes,” a company spokesman said.
The additional output will help it serve better its existing markets as well as serve new overseas markets it is developing.
The Saudi market, accounting for 70 per cent of its sales, continues to remain the company’s focus. The remainder of the sales was accounted for by exports including those to GCC countries and the company expects exports to maintain the same level this year. 
UGS claims to have had a market share of 55 per cent in the GCC region and 65 per cent in Saudi Arabia in 2003
“We expect this share to go up considerably during 2004,” said the spokesman.
Lately the company has been trying to tap opportunities in India, Iran, Jordan and Sudan. “Going to more distant markets involves higher freight charges, so exports become worthwhile if other terms are attractive,” the spokesman observed.
UGS, set up in 2001, has capacity of 350,000 tonnes per year (tpy) at its plant in Jubail Industrial City. The exclusive range of structural steel products produced at UGS caters to the growing local demand in the region and makes it self-dependent in construction steel
The company manufactures a wide range of structural steel medium section products comprising IPE/IPEA/IPEAA beams (80 mm to 200 mm), UPE/UPN channels (50/80 mm to 200 mm), equal angles (40 mm to 140 mm), flat bars (60 mm to 250 mm), square bars (30 mm to 80 mm) and round bars (25 mm to 80 mm).  UGS products conform to various international standards and are supplied to construction and structural projects in the region and elsewhere.
UGS was promoted as a private sector venture by a group of leading GCC entrepreneurs under the leadership of vice chairman and managing director Mazen Allahiq, described by the staff as a visionary. The plant was set up with state-of-the-art technology supplied by Simac, Italy.  Simac is a fully owned subsidiary of SMS AG, Germany, which is a globally renowned steel plant equipment supplier.
Among the important factory facilities are an 80-tonnes per hour walking hearth furnace and a 15-stand Simac rolling mill as well as a host of other modern auxiliary facilities such as a laboratory and a roll shop. The facilities were set up with an investment of about SR400 million ($106.6 million) in 2000. Carbon steel billets imported from various East European and Middle East sources are processed in the mill for conversion into the various products that UGS has specialised in.
“The company has introduced stringent online quality control systems and the latest testing equipment with the aim of manufacturing products to international standards such as ASTM, DIN, BSEN, JIS and ISO,” the spokesman said.
The product range was developed after identifying potential applications and the characteristics of regional demand. The company sells directly to almost all end users, including large steel fabricators in the region, who are involved in the segments of pre-engineered building systems and transmission and communication towers. Among the end users are fastener manufacturers and irrigation equipment manufacturers. The company sells to direct consumers and small fabricators through a network of stockists spread all over the GCC region.
“While most of the end users buy directly from UGS, the company commands a dominant market share in the stockist/retail segments in Saudi Arabia and the GCC region,” said the spokesman. 
“Regional customers are delighted to have products made available locally as it resolves a lot of uncertainty and lead time issues in importing from distant sources such as Poland, Japan, Korea, Ukraine, Taiwan and Turkey.”
 On the company’s achievements, the spokesman said: “In a short span of three years, UGS has been able to establish itself as a clear leader in the region’s structural steel market, warding off competition from various established international steel sources.
“It has successfully alleviated the regional dependency on imported steel which at times was characterised by low quality. At the same time indigenously manufactured structural steel products have supported various economic and infrastructure development projects in the region, which has seen a construction boom in last couple of years.
“International quality standards and service levels have helped UGS attain the status of a preferred supplier to large customers such as Zamil, Hidada, Kirby, Al Babtain, Saudi Building System, Emirates Building System and Mammut Industries.”