Qatar Steel Company (Qasco) has signed two major agreements with a 17-bank consortium to fund the expansion of its steel plant operations.

The agreements are a $483.5 million term facility and $75 million standby facility to expand Qasco’s plant in Mesaieed Industrial City, south of Doha.
The company, a wholly owned subsidiary of Industries of Qatar, said the financing marked a significant milestone in the company’s growth.
Expansion plans include introducing a new direct reduction plant to annually produce 1.5 million tonnes of iron to bring production up to 2.3 million tonnes.
It also envisages increasing molten steel production from 1 million tonnes to over 1.5 million tonnes annually and doubling the rolling capacity by installing a new rolling mill to increase production to over 1.5 million tonnes annually.
Detailed design and engineering for the project is in progress and civil works have started, a statement by Qasco said.
The 17-bank lending group consists of a mix of local regional and international banks. First drawdown of the facility is expected shortly. Completion of the project is scheduled for July 2007.
Shaikh Nasser Bin Hamad Al Thani, Qasco’s general manager, earlier said the company produced more than 1.1 million tonnes of loose iron and 800,000 tonnes of reinforced steel in 2004. The UAE is the biggest purchaser of Qasco’s products, followed by Saudi Arabia, although about half of Qasco’s total production is absorbed by the Qatari market.
Shaikh Nasser also said that Qasco was looking at Iraq as a new potential market.
He said competition by other GCC producers was welcome, as the company was confident in its experience and quality of products.
“We manufacture a variety of products now, including hot rolled deformed bars which have been produced for the first time in Qatar.”
He added that steel prices could rise during the current year due to a 40 per cent hike in the prices of raw materials, in addition to the weakening of the dollar.
The expansion came at an opportune time.  “This is a good time for us, especially in the local region,” said Shaikh Nasser.  “There is an increase in demand for construction, development and infrastructure and we expect this demand to continue,” he told Reuters.
Sheikh Nasser added that Qasco steel was competitively priced and was benefiting from current high prices due to growing Chinese and Iranian demand for raw materials including steel.
“Steel is cyclical, it goes up and down. Now it is up, but we are a low-cost producer of steel. We have a proven track record of surviving the (market) lows and benefiting from the highs. And this gives our investors confidence no matter what the cycle of the business is,” he said.