UAE steel output to rise 20%

23 November 2016

Driven by major infrastructure development projects across the country, the UAE steel manufacturing sector, boasting an installed annual capacity of five million tonnes, is on track to record a 20 per cent growth this year compared to 2015.

"With the existing developments for the Expo 2020 and the plans envisioned under the Vision 2021, projects are on track to be completed before the year 2020. This anticipates a growth in the industry by 30 per cent until the end of this decade, which will help local steel manufacturers cater to the three to four million metric tonnes rebar demands for all these projects," said Bharat Bhatia, CEO of Conares, the second largest private steel manufacturer in the UAE.

Speaking on the sidelines of Big 5 Exhibition at the Dubai World Trade Centre, Bhatia said there are positive expectations on steel demand, which will grow substantially.

Currently, the operational capacity of the steel manufacturing indsutry is 3.6 million tonnes while the annual domestic demand is around three million tonnes, he said.

"We believe, in the coming three years, the demand for steel products in the UAE is expected to increase by 10 per cent in 2017, 20 per cent in 2018 and a similar pace by 2019. This is an estimate based on the projects, which will be commencing due to nearing completion date related to the Expo 2020."

Conares is exhibiting at Zabeel Hall at Dubai World Trade Centre. Abdullah Al Saleh, Undersecretary of the UAE Ministry of Economy, visited Conares stand.Bhatia said Conares is in a growth path to deliver one million metric tonnes of steel annually. The company's current market reach for steel rebars is almost 100 per cent in the UAE, while for steel pipes it is 65 per cent in the UAE, 20 per cent in the region and 15 per cent in other parts of the world. He said the demand for steel is on an uptrend for the past few months in line with the ongoing infrastructure development activities to support the Expo 2020. The Dubai Metro line expansion, the UAE national railway project, as well as the nuclear power plant in Abu Dhabi, to name a few, would also boost the steel sector further.

Bhatia said the local mills in the UAE, are prepared to meet the demand that will lead to Expo 2020. "We have the capacity, the technology and the commercial viability to address these local requirements."

He said Conares had delivered a total of 80,000 metric tonnes of steel to several key infrastructure projects including Jebel Ali Bridge connecting North and South.

"We are aligning our production with the country's commitment to infrastructure developments," he said. 'Made in UAE' steel products are more reliable than imports that usually take a minimum of 30 days to arrive in the UAE, he said. Traders in the UAE are keen to buy from local manufacturers in order to save inventory cost and avoid risk of price fluctuations, said Bhatia.

"The UAE has a combined capacity to produce five million tonnes of steel rebars annually, which is more than sufficient to meet current demands of the country needing 3.5 to four million tonnes annually." He further said: "Apart from the announcement of major landmark projects, the improved efficiency of supply chain ecosystem in the industry, the capacity and technologies in place to cater to the requirement, and facilitating the adoption of latest innovations in production have also played a key role to signal a boom in the steel industry. Moreover, steel manufacturing has been vital to the growth of non-oil-dependent gross domestic product, further serving the economic diversity."