UAE Building 90,000 Ton Stainless Steel Mill for Home and Export Markets

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Researched by Industrial Information Resources, Incorporated; Houston, Texas). The special construction material demands of the oil and petrochemical industries, plus a conscious move to diversified home industries, and supplying consumer and export demand is not only producing world class service and technical companies in the Middle East, but is also motivating heavy industrial investment 'upstream' from the domestic product market and downstream - or maybe sidestream - from the traditional market-detached oil pumping business.

Illustrating this movement is the announcement of a project to build a $200 million stainless steel factory in the UAE (United Arab Emirates) to produce 90,000 tons of cold rolled austenitic stainless steel per annum.

The project will be managed by the United Stainless Company (USCO), set up for the project, which is partly owned by the Gulf Investment Corporation (GIC). GIC, established under the auspices of the Gulf Cooperation Council in 1983, is one of the largest regional financial institutions. GIC will invest $200 million in the project. GIC is owned in equal parts by the governments of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, with total assets in excess of $6.6 billion. USCO is owned by GIC, UAE investors, and the Kuwaiti private sector.

The construction contract for the mill has gone to Danieli (Buttrio, Italy) and Outokompu (HELSINKI:OUT1V) (Helsinki, Finland), in which the Finnish government has a 38.3% stake, will provide technology and technical assistance. International steel trader Stemcore (London, UK) has signed an agreement in which it will take 70,000 tons of the mill output for sale outside Middle East regional markets.

The mill is expected to go into commercial production at the beginning of 2007.

In March 2004, when world crude steel production was estimated at 85.9 million tons, representing a year-on-year monthly increase of 5.9%, and a year to date increase of 8.7%. Middle East crude steel output increased by 4.6% in the first quarter, to reach a figure of 3.27 million tons. In the same period, Turkey produced 4.958 million tons for a year-on-year increase of 10.3%.

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