A new steel-making company fully owned by Saudi-based Al Tuwairqi Holding Company will start operating next year and help reduce the group’s imports of steel billets to zero.

Arab Iron and Steel Company’s complex, which includes a billet unit, a direct reduction unit and a melt shop, has an annual capacity of two million tonnes, raising group capacity to 3 million tonnes. The group holds 76 per cent of Al Ittefaq Steel Products Company, one of Saudi Arabia’s three largest producers.
“This is part of our strategic plan to become a fully-integrated steel producer and will reinforce our position as the kingdom’s largest private steel producer,” said board member Faisal Al Haddawi.
“We will commission the complex by 2010. We bought the land and the machinery. We are off with the project. Without this project we will need to import steel billets to meet the design capacity of our reinforced steel bar plants,” he said.
Al Ittefaq has a design production capacity of 3 million tonnes of reinforced steel bar per year, but is currently producing only 1.7 million tonnes.

Mill ready to go
“A fifth rolling mill unit of reinforced steel bar is ready to go but we expect to start commercial production in 2010. It has a capacity of 1.3 million tonnes, but it is not viable to start it now given the conditions in the market,” Al Haddawi said.
“Right now we produce a million tonnes of steel billets per year which partially caters for our current production of reinforced steel. Once we commission the commercial launch of the fifth rolling mill we will no longer need to import steel billets.”
Al Ittefaq competes with Al Rajhi Steel and Hadeed, owned by Saudi Basic Industries Corporation in the lucrative Saudi market, where the government is spending $400 billion from oil revenues to develop infrastructure including new schools and universities.
Al Ittefaq recorded sales of 1million tonnes in the first seven months of this year, which is up 15 per cent compared with the same period last year.
“We exceeded our sales projections without having to export anything. It all came from the domestic market despite the high level of inventories we had last year and the competition by importers,” Al Haddawi said.