Saudi-based Al Yamamah Steel Industries Company has announced that one of its key subsidiaries, Al Yamamah for Reinforcing Steel Bars Company, has signed up leading Italian company Danieli for setting up a steel billet production plant in the kingdom by 2029. 

Under the SAR270 million ($71 million) contract, Danieli’s scope of work includes manufacture, supply and installation of the steel billet production equipment at its Saudi premises, said Al Yamamah Steel Industries Company in its filing to Saudi bourse Tadawul. 

Based in Buttrio, Italy, Danieli is one of the world's top three manufacturers of plants and machines for the metals industry and is also a specialist in designing and building equipment for both ferrous and non-ferrous metals, including electric arc furnaces and rolling mills.

Founded in 1914 by Mario Danieli, the company has grown from a small steelmaking operation in Milan to a massive engineering and manufacturing corporation. 

Today, the company controls projects from in-house design to on-site commissioning, maintaining global manufacturing workshops to ensure standardised production.

Al Yamamah Steel Industries said as per the deal, the entire work will be completed by Danieli within two and a half years.

On the financial impact, the Saudi group said it is expected to be reflected in the second half of 2028.

Last month, Al Yamamah for Reinforcing Steel Bars Company had won approval from the authorities for a capital increase through the issuance of 25 million new shares at the company's book value of SAR12 ($3.20) per share.

Al Yamamah Steel said it will be subscribing to 6.3 million shares in the rights issue for a total of SAR75.6 million, with the investment to be funded from its own resources.

The proceeds from the share issuance will be used to strengthen the subsidiary's financial position and finance the construction of the second phase of its plant, it added.-TradeArabia News Service