Finland’s steel producer Outokumpu’s Saudi subsidi- ary is expanding its Riyadh plant to create capacity for the production of process pipes of higher diameters than are now produced at the plant, the local factory said.

Outokumpu Armetal Stainless Pipe Co Ltd makes ornamental tubes, sheets, process pipes and fittings in Riyadh’s Second Industrial City.

The company makes process pipes of diameters up to 2.5 inches, but a new production line the company plans to install this year will enable it to have sizes from 2.5 inches to 8 inches.

Outokumpo Armetal is owned 51 per cent by Outokumpu Stainless Tubular Product (OSTP) and 49 per cent by the Saudi Al Hejailan Group. The company started operations in October 2008 on a site that has a total area of 2,000 sq m.

The Riyadh factory serves customers in a wide range of industries from process industry and industrial machinery to the building, construction and household sectors.

Sales in its first three months of operation in the fourth quarter of 2008 were SR4.8 million ($1.27 million), but business picked up in 2009 with sales amounting to SR22.8 million. The company hopes to touch SR60 million this year.

Ornamental tubes and sheets were most in demand in 2009, the company dispatching 1,300 tonnes to various customers. Next in importance was plain tubes of which 600 tonnes were distributed to markets. Sheets also did well with 430 tonnes of the product sold that year.

Most of the volumes sold were ordered by Saudi parties with the remainder of sales going to other GCC states. The sales territory assigned for the company covers the GCC region, Yemen, Iraq, Iran, Jordan, Syria, Lebanon and Egypt.

Significant orders
In 2009 Outokumpu Armetal fulfilled significant orders from Saudi Services for Electro Mechanical Works, Zamil Group, Getco, Al Khorayef Group, Kharafi and Wetico. The company is in the final stages of completing an order from Amana Contracting which will use the products for an Almarai dairy.

Most of the joint venture’s products are sold within Saudi Arabia

Raw materials such as coils, scripts and sheets are sourced mainly at the parent company Outokumpu while some quantities are procured from United Stainless Steel Company in Bahrain.

“Our growth strategy is to cover all Middle Eastern countries. For the time being we have three showrooms, one in Riyadh to cover the central region, another in Jeddah to cover the Western Region and the third in Dammam to cover the Eastern Region,” said a spokesman. “Our vision is to be the undisputed number one in stainless steel with success based on operational excellence.”

The Outokumpu Group, one of the world’s largest stainless steel producers and acclaimed for its technical support services and R&D, employs some 7,600 people in more than 30 countries. Its plants in Finland, Sweden, the UK and the US produce a wide range of stainless steel products including hot and cold rolled, precision strip, tubular and long products together with a comprehensive range of fittings, flanges and welding consumables.  

Al-Hejailan Group of companies, founded in 1980, has become one of the leading providers of professional services in Saudi Arabia.

It began as an engineering and contracting firm, gradually evolving with the economy into different areas of specialisation such as industry, ventures and services. The group’s primary business interests encompass a variety of capabilities, which include engineering design and supervision, construction manag-

ement, industry, trading, logistics support, telecommunications and operations and maintenance.