Conares, the UAE-based steel company, will invest a further Dh75 million to Dh80 million to expand its manufacturing facility in Jebel Ali Free Zone (Jafza), Chief Executive Bharat Bhatia, told Gulf News on Sunday.
This follows last weeks announcement that Conares is expanding to add another 250,000 tonnes of pipes and tubes production capacity at the same facility at a cost of Dh92 million.
Bhatia, speaking in Dubai at the company’s 25th anniversary, said the additional expansion will be to manufacture new products. He did not state what they would be or how much overall capacity it will add but said the expansion will be over the next 12 to 18 months.
Conares current annual capacity is 500,000 tonnes of steel bar production and 250,000 tonnes of pipes and tubes. The additional pipes and tubes capacity announced last week is to be commissioned in the fourth quarter and will increase overall capacity to 1 million tonnes.
Bhatia said Conares will produce around 600,000 tonnes this year with revenues to grow by between 30 to 40 per cent to cross the Dh1.2 to Dh1.5 billion mark. Last year, the company produced 400,000 tonnes.
Conares is increasing capacity to meet growing demand driven by the domestic market with 60 per cent of all pipes and tubes and 80 per cent of all Debar produced for the UAE.
But the potential lifting of international sanctions could have massive windfalls for the steel industry. Many companies, including those in the UAE, have been blocked for years from doing business with Iran by US-led sanctions.
Iran and world powers, including the US, are scheduled to wrap up negotiations over Tehran’s nuclear programme next month that could see the Iranian economy welcomed back into the international community.
“Iran is big,” Bhatia said bullishly, convinced that demand would be significant.
“If the market opens for Iran … that will change completely our ideas on enhancing our facility,” he said.