Bahrain-based Foulath is aggressively enhancing its role as an iron pellet supplier and assuming a new position as a provider of steel products through integrated facilities.

Its pelletisation plant is under construction in Bahrain, adjacent to an existing one, and work is set to begin on three others, two in Egypt and one in Oman.
Foulath, owned by Gulf Investment Corporation (50 per cent) and by Qatar Steel and MA Al Khorafi and Sons Company (25 per cent each), also plans to set up an integrated steel plant that will be built in Bahrain near its pelletisation facilities in the Hidd industrial area.
Foulath is building the Bahrain pelletisation plant through Gulf Industrial Investment Company (GIIC), which it fully owns. Kobe of Japan is the main construction contractor for the $600 million plant which will have capability to produce 7 million tonnes annually. Completion is set for late 2009.
The existing GIIC pelletisation plant has capacity of 5 million tonnes per year.
Each of the planned Egyptian pelletisation plants will have an annual capacity of 7 million tonnes with one located in Alexandria and the other south of Suez. The enterprise will be a joint venture between Foulath and Egyptian companies and investment for each will be $700 million.
Foulath’s Oman pelletisation plant will be built in the Salalah Free Zone as a joint venture with JFE Steel Corporation and have the same capacity as the Egyptian plant. JFE will take a 40 per cent stake in the $700 million venture and also half the output.
United Iron and Steel plant, being set up in Bahrain in the Hidd industrial area, is Foulath’s integrated direct reduced (DR) iron factory with annual capacity of 1.6 million tonnes and an investment of $1.6 billion.  It will use 2.4 million tonnes of pellets supplied by Foulath and facilities include a steel melting unit and a rolling unit for the production of heavy and medium sections.
The plant is set for commercial operations in 2011. Foulath has a 51 per cent share in the venture with the remainder stake held by Japan’s Yamato group.
While iron producers worldwide are facing a bleak period due to the slowdown in the global economy, Foulath expects prospects to brighten by the time the DR iron plant gets going in Bahrain.
In 2008 GIIC supplied 3.5 million tonnes of pellets to Qatar, Saudi Arabia and the Far East with Saudi Arabia’s Hadeed receiving 1.2 million tonnes and Qatar Steel 600,000 tonnes. The company would have been able to supply its entire production capacity of 5 million tonnes had it not been for the global economic crisis in the fourth quarter.
GIIC hopes sales will pick up in the second quarter of 2009.
Foulath is confident its pellets from all its plants will not run short of purchasers as international demand for DR iron will grow in course of time. In the Gulf region itself, Abu Dhabi’s Emirates Steel Industries is building a DR iron plant in 2009 for which GIIC will supply half a million to a million tonnes of pellets annually and in Oman Shadeed Iron and Steel Company is also in  the process of completing its own plant for which GIIC will be a supplier.
From the additional capacity it is creating, GIIC also plans to supplier higher quantities to old customers like Hadeed and Qatar Steel as well as customers in India and the Far East. 
Foulath’s competition in pellets in the Gulf is currently restricted to just one manufacturer – a Brazilian plant that is expected to come up in Sohar, northern Oman.
The company also owns a stainless steel company in Bahrain that has annual capacity of 100,000 tonnes.