Emirates Steel revenue soars to $1.8bn
Abu Dhabi, February 16, 2014
Emirates Steel, the UAE’s top industrial conglomerate, said it had registered solid growth in 2013 with its revenue hitting Dh6.5 billion ($1.8 billion), almost eight per cent higher compared to the year before.
A Senaat portfolio company, Emirates Steel fared well last year despite sluggish demand levels across the global steel industry, excess steelmaking capacity in the world markets and continuing volatility in raw material costs.
The production of long products in 2013 reached 2.6 million tons, an increase of 12 per cent over 2012; of which, 1.7 million tons were rebar, 316,000 tons structural steel and 573,000 tons wire rod, said the company in its statement.
Encouraged by a buoyant project market in the region, the steelmaker sold 3 million tons of product in 2013, of which 1.9 million tons were sold in the domestic UAE market. The balance was exported to a diverse range of markets, including Europe, the Far East, the Americas and the Middle East.
Commenting on the solid performance, CEO Saeed G Al Romaithi said: "In spite of the difficult market conditions our business continued to grow and enter new markets, delivering a solid performance in 2013."
While economic conditions for the global steel sector remain uncertain, many analysts are forecasting demand growth for steel in 2014.
In the Mena region, the World Steel Association (WSA) expected steel demand to grow by 1.7 per cent only, to 64.3 million tons, in 2013 - after 2.2 per cent growth was recorded in 2012. In 2014 the WSA forecasts steel demand in the region to grow by 7.3 per cent; to reach 69 million tons, said the statement.
Al Romaithi pointed out that the construction projects in the GCC would be the key drivers in supporting the steel industry’s growth in near term, followed by oil and gas, petrochemicals and other infrastructure projects.
“The GCC’s construction sector is becoming more stable which will drive the demand for steel. But more importantly, the multi-billion dollars infrastructure projects planned across the region will be the main driver and the cornerstone of the region’s economic growth in the coming years,” he remarked.
According to him, 2013 was an important year for nationalization at Emirates Steel. Throughout the year, the steelmaker provided professional education to UAE nationals with more than 624 training courses offered, stated Al Romaithi.
Their numbers in the workforce also increased, pushing their ratio to 19 per cent. This percentage is expected to further increase to around 30 per cent in 2018, he added.
Al Romaithi said: "The operating environment in 2013 continued to be challenging but we, with the support of Senaat, delivered progress in a number of important areas. In May, Emirates Steel dispatched its first shipment of structural steel to the American and Mexican ports of Huston and Altamira, a move which provided tangible evidence of the recognition of the company and its growth potential in the global marketplace."
In September the company made its first delivery of UAE–produced nuclear grade reinforcing steel to Barakah, the site of the UAE’s peaceful nuclear energy program. Further orders will be placed over the next seven years as the construction of ENEC’s four nuclear energy plants progresses.
“We have succeeded in exporting our products to our regional markets, in addition to the Indian sub-continent, Asia and Africa. With our recent sales to Europe and the Americas we have now extended our global footprint to establish a measured presence in these developed markets,” Al Romaithi added.
In November, the company joined hands with Abu Dhabi National Oil Company (ADNOC) and Masdar, the nation’s renewable energy company, in developing a carbon capture, usage and storage (CCUS) project.
The project will involve Adnoc and Masdar building a $123 million CO2 compression facility and a 50 km pipeline, along which the captured CO2 will be pumped to Adnoc’s oilfields.
He said Emirates Steel was a key partner in this project; the CO2 generated in the company’s plants will feed the project when it goes operational in 2016 and the compression plant will be located close to Emirates Steel’s premises.
The project will sequester up to 800,000 tons of CO2 annually – the effective elimination of a major element of Emirates Steel’s carbon footprint, which will improve Adnoc’s oil recovery, he noted.
“CCUS presents a viable technology for energy-intensive industries to lower their carbon footprint. By capturing and storing its CO2 stream, Emirates Steel will be setting a clear example in the support of Abu Dhabi’s sustainability objectives, stated Al Romaithi.
“This is far from the first time that gas has been pumped underground to improve oil recovery, and in the past the UAE has used surplus hydrocarbon gases for this purpose. However, with the increasing demand for energy the CCUS project will allow the UAE to preserve its natural gas for domestic electricity generation,” said the top official.
"Emirates Steel enters 2014 with optimism, the company looks to maintain its growth and deliver an enhanced range of products and service levels to its customers, and to deliver even more impressive results for its stakeholders," he added.-TradeArabia News Service