Commissioning has begun at Emirates Steel Industries’ (ESI) new Dh802 million ($218 million) steelmaking plant at Mussafah.
The facility, the UAE’s first integrated steelmaking operation, will produce billets for the company’s new state-of-the-art rolling mills, said an ESI statement. The plant has a production capacity of 5 million tonnes per year.
“ESI is pioneering the way for the steel industry in the UAE and will achieve this vision through a series of expansion projects,” said Al Nowais.
He said it was a significant component of a backward integration plan and provided a competitive advantage over many major steel players in the region.
“Once commercial production begins in May, the production of steel billets will displace much of ESI’s imported billets and also lower production costs by a significant amount,” he added.
According to him, ESI has raised rolling mill production capacity to two million tonnes per annum over the past year alone as part of the first phase of its expansion strategy.
“ESI has been importing close to 1.2 million tonnes of steel billets a year from several countries,” said Saeed Al Romaithi, ESI’s vice president for production.
“The operation of the new steelmaking plant will reduce our reliance on imports and increase our share in the local market. The plant will also allow ESI to transfer billets directly from the caster to the rolling mills. This will reduce our energy consumption and increase efficiency in our operations,” he added.
Last year, ESI had signed a Dh2.5 billion deal with Italy’s Danieli & Company to execute a second vertically-integrated phase of its expansion, which will increase the operation’s steel production capacity to three million tonnes per annum by 2011.
The final link in the production chain will be commissioned later this year with a plant that converts imported iron ore pellets into raw iron for the new steelmaking plant. The import facilities for the pellets became operational in February of this year.
ESI’s ambitious expansion plan addresses the region’s growing demand for steel and will increase output to 5 million tonnes per annum.
