Fabricator Yanbu Steel Company (YSC), which has had its production facilities in Saudi Arabia’s western area for more than 25 years, says it will open operations in the Eastern Province this year beginning with a paint shop and subsequently moving on to fully fledged fabrication activities and exports.

YSC, recognised as a major tank contractor, also announced it would shortly introduce large-scale fabrication in an extended range of materials including titanium, hestalloy, inconel and monel, contributing to import substitution.
It also plans to work closely with certain original equipment manufacturers (OEMs) as their manufacturing and servicing hub for Saudi Arabia and possibly the Gulf region.
Among new developments, it plans to introduce a new line of shell and tube heat exchangers of larger capacities in various metallurgical combinations.
The new Eastern Province facilities will not only serve that province but also help meet the requirements of neighbouring GCC markets, YSC sales and marketing manager Anup Kumar Chhonkar said.
“At present YSC is engaged in the domestic market only with little or no focus on the export markets,” said Chhonkar adding that the Eastern Province factory would allow for better logistics and economics for export to nearby Gulf markets.
The company was set up in 1982 as a joint venture with PDM Inc of the US but became a fully owned Saudi entity in 1994.
Turnover in 2007 was SR208 million ($55.5 million) and expectations are that the figure could rise to SR225 million this year.
“For YSC the pipeline of projects is very promising with further mega projects already confirmed for the Yanbu area,” said Chhonkar.
The company is currently involved in various chemical storage and distribution projects in Yanbu Port worth SR 200 million in the first phase.
Yanbu Steel Company has been involved in major projects such as the soon-to-be-completed Yansab (Yanbu National Petrochemical Company) for which YSC has executed projects worth almost SR300 million.
Contributing most to the 2007 turnover were site-built storage tanks and associated turnkey elements for crude oil, fuel oil, kerosene, diesel and gasoline.
Other prominent items were tube/shell heat exchangers for desalination plants, pressure vessels of all types, shop-built  smaller-capacity tanks up to 6 m in diameter and fabricated structural steel items.
YSC’s tank manufacturing capabilities include cryogenic, double-wall, floating roof and very large solid stainless steel tanks as well as the more conventional dome and cone roof tanks.
The company has delivered pressure vessels in excess of 300 tonnes as well as fabricating vessels and columns from carbon steel and exotic materials including inconel. It has supplied and erected more than 30,000 tonnes of structural steel and modularised steel weldments over the last 10 years.
Its main facilities cover 20,000 sq m of covered workshops in the Red Sea industrial city of Yanbu and employ a multinational workforce of more than 1,000.
Its clients have included Saudi Aramco, Sabic, Saline Water Conversion Company and Saudi Electricity Company.
“YSC is gradually developing from a mainly static equipment fabrication company to a  turnkey project execution company involved in providing ‘single project execution solutions’ for the requirements of oil and gas, chemical, water and other industries,” said Chhonkar.
Yanbu Steel Company operates an overall quality assurance system certified by the British Standards Institute to ISO 9001:2000 and quality assurance systems for pressure vessels under the certification of the American Society of Mechanical Engineers (ASME).
Referring to plans to work closely with OEMs, the official said: “These are typically European and American companies who source their specialised mechanical products from the parent countries but have to service them at regular intervals at viable costs and who also would like to increase the amount of local input in their products.”
While major new projects are being announced from time to time in Saudi Arabia, the fabrication industry there has to deal with the rising costs of raw materials.
Chhonkar said a sharp climb in steel prices, the main raw material, had impacted the prices of other major components used in projects such as pipes, fittings, valves, pumps, structural material and rebars for concrete, electrical and instrumentation components.
“There has been an increase of almost 40 per cent in the price of steel alone in the past four to five months. There has also been general inflation to the tune of 10 per cent in Saudi Arabia which has raised the cost of labour. The delivery of steel is marked by uncertainty with manufacturers quoting delivery of a minimum of six months,” said Chhonkar discussing what he described as a “difficult period that the fabrication and project execution industry has been going through.”
Chhonkar concluded:” There does not seem to be an immediate end to this situation as the steel prices still remain unpredictable and very volatile having crossed all previous projections.”