EMIRATES Steel is pushing ahead with its expansion goals of producing integrated steel solutions utilising its highly skilled UAE national employees and producing steel to international standards, says Hussain Al Nowais, chairman of Emirates Steel and Senaat, which owns the company.
The objective, he says, is to supply the global markets with “UAE made” quality steel products.
In line with these ambitions, Emirates Steel has secured credit facilities worth $1.3 billion with 19 local and international banks to support the expansion of its integrated steel plant, which is the only one of its kind in the UAE.
Commenting on the deal, Al Nowais says: “The facilities will be used to refinance $1.1-billion worth of existing financing that was put in place in 2010 through nine banking institutions to finance our expansion projects.”
Another $263 million is being invested in acquiring quality steel assets by Emirates Steel.
The 2010 financing was for the Phases One and Two expansion projects, which pushed up plant capacities in 2012 to 3.5 million tonnes per year. These projects are now complete and generating solid cash flows.
Al Nowais has billed the current transaction as a real success: “As an established corporate, the company has been able to significantly reduce its borrowing costs and drive the pricing down. We have also extended the loan tenor to eight years, which allows us more flexibility in managing our financial resources. This reflects Emirates Steel’s coming of age and echoes the trust local and international banking institutions have in us.”
He further adds that the transaction was concluded with no government guarantees and with more favourable terms than the 2010 facilities. The deal, which was brokered by France’s BNP Paribas, was four times oversubscribed.
“The deal will allow us to consolidate Senaat’s steelmaking assets under Emirates Steel, which was set up in 1998 at a cost of $3 billion to provide integrated solutions in steelmaking and to support local downstream industries in line with Economic Vision 2030,” he explains.
Emirates Steel CEO Saeed Al Romaithi says the financing will also support further expansion of Emirates Steel’s product range: “We are now working on bringing to market several technically-challenging new products to meet the growing demands of our customers and to expand our customer base”.
Plans are now under way to add value-added products to the range to reduce its exposure in the highly-competitive commodities markets.
“The new range of value-added products includes branded nuclear quality steel, medium and high carbon wire rod and offshore-grade heavy sections and sheet piles,” he says.
In total, the company boasts three bar mills, a wire rod mill and a structural steel mill with a combined capacity of 3.5 million tonnes a year.
Emirates Steel recently expanded its range with the launch of sheet pile materials, making it the only steel manufacturer in the Middle East to develop and sell these high value-added products
According to Al Romaithi, Emirates Steel is developing a wide portfolio of sheet piles, a range that possesses significant and highly cost-effective structural and pile-driving properties. Steel sheet piles are used in constructing both temporary and permanent load-bearing retaining walls.
“We started developing sheet piles as early as 2012 and a year later the first new profile passed all of the required tests, allowing us to go into production,” says Al Romaithi.
The company, which launched its first sheet pile brand, the Z-shaped ESZ18, in December 2013, sold the first batch of 1,750 tonnes of sheet pile in March of this year in Europe, following which it started taking full orders for Z-piles used as barriers to support excavations. It is planning to add five more Z-products within two years and aims to complete the range in 2017.
According to Emirates Steel estimates, the demand for sheet piles in the GCC is around 80,000 tonnes per year. The company said it plans to produce up to 150,000 tonnes of sheet piles a year, depending on market demand.
Strategically located in the Industrial City of Abu Dhabi, 35 km away from the heart of the city of Abu Dhabi, Emirates Steel utilises the latest rolling mill technology to produce rebar, wire rod and heavy sections.