The Steel Industry Makes Investment
Never the steel companies have emerged as an influential force in the economic life at any time as they appear today, especially after the world crisis. This has increased the power of these companies, they being occupying an important and basic position in the current investment trends. A significant part of such investments is concentrated on setting up new steel mills or on expanding existing mills.
The emergence of companies as an economic force is the competitiveness which has come to form a fundamental criterion for the success of any company, especially with the growing transition from the economies in which pricing was determined by an administrative or governmental decision to the market economies in which prices are subject to the supply and demand conditions and to the competitive capability of every company.
These economic transformations have resulted in the emergence of many companies which may be described as to have an economic force and a strong presence in markets, as the importance of a company is measured by its economic role.
Despite the fact that the Arab region is not counted among the major steel producers in the world, this region has got a great steel industry which is steadily expanding and produces about 20 million tons of crude steel per year.
There are now many mills in the region which are under construction on a large scale. Many of the existing mills are now under expansion or modernization constituting bold headlines in the Arab steel industry and on the pages of this issue of the Arab Steel magazine of which, to mention, are:
The Saudi Iron and Steel Company (HADEED) has mostly completed installation of the rolled wires unit (with a capacity of 500 thousand tons per year) as a part of its project to build a new facility in Jubail Industrial Zone.
The Saudi Tuwairqi Group is continuing execution of its investment projects which it has announced, of which is the construction of an electric arc furnace (EAF) with a capacity of 2 million tons per year.
The Emirates Steel, which is the largest integrated steel mill in the United Arab Emirates, has also announced that it has achieved a record figure at the world level of a daily steel production by the electric arc furnaces using reduced iron. Production of the electric furnaces has exceeded the design capacity producing 34 metallic charges with a total daily production of 5197 tons of liquid steel.
The Omani «Majan Steel» Company which manufactures long steel products is planning to open the rebar mill No. 2 by the end of July.
The State Company for Iron and Steel /Busra, is looking for investors to finance rehabilitation of its facility in Busra, which stopped production during 2003.
Within this perspective we may talk on Arab steel companies, which are big in their markets, more interest attractive and great in their ambitions. These companies do not stop at the limits which they reach but they always do their best to grow steadily by diversifying their products and increasing their production capacities in order to become companies passing over their regional borders into being international, in spite of all circumstances and crises.
In his presentation in the Arab Steel Summit 2011, Peter Marcus from World Steel Dynamics, said that the Middle East is one of the best places for new steel mills because the Middle East has a growing demand and low cost natural gas and electricity and that many of these mills are located near deep water sea ports.
What the steel industry in the Arab countries see of concentration of investment in this important industrial sector gives the steel companies the leadership role in the industrial investment contributing to creating a base which will support the economic growth and guarantee its continuation.
Mr. Mohamed Laid Lachgar, the Secretary General of the Arab Iron and Steel Union, has expressed, in his working paper presented to the Organization for Economic Cooperation and Development (OECD) in the 70th session of the Steel Industry Committee, the need of the Arab countries for more investment in this industry. He has also pointed to the diametrical relation in the Arab region between the rise of the oil prices and the increase of the financial surpluses of the oil exporting countries resulting from the sales revenues, and that this will encourage the governments to increase the investments directed to the infrastructure projects, housing and construction projects and the major national projects which, in turn, will lead the huge economic recovery, which will increase the demand for the iron and steel products and encourage investment and development.
To have a look at a number of the announced new projects of steel production, either in the presently existing companies or in the companies intended to be set up, requires concentration on the importance to be given to this industry within the conception adopted by the Arab Iron and Steel Union, which is the conception of the Arab steel industry, to take its distinct position in the international statistics. This look at the reality of this industry and its future development will continue to present a more brilliant imagination of this industry, as it is not possible to ignore the fact that a part of the production of these new projects will go into the world markets as exports and that a decline in the volume of imports will be expected.
What the Arab steel industry witnesses of a rapid growth will require not only that this industry must take its position among the steel industries in the world but also more coordination between the parties of this industry at the Arab level.