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Dubai - Conares, the second largest private steel manufacturer in the UAE, has initiated 'Magnet', a platform to discuss and disseminate insights on the steel industry. The first edition of the 'Magnet' was held in Dubai recently with participation of key industry stakeholders including Emirates Steel, Conares, Hamriyah Steel and Union Iron & Steel. In the presence of a representative from the UAE Ministry of Economy as an observer, the meeting touched a range of key issues on the market such as rebar imports, market trends, product costing, promotion of local products and so on.
Participating in the meeting, the local steel producers highlighted that despite the strict implementation of customs duty of five per cent on imports of steel rebar and wire rod, there is an upsurge of rebar imports in the UAE from non GCC countries. Emphasising that the UAE is the foremost importing country and targeted market within the region, as the UAE's imports of steel rebar are significantly higher than the other GCC countries.
On hosting Magnet, Mr. Bharat Bhatia, CEO of Conares, expressed his gratitude to the Ministry of Economy and other steel producers for their participation. "With directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, establishing the Industrial Coordination Council has been encouraging to reform the industrial footprint of the UAE. The Ministry of Economy, which also chairs the Industrial Council, had been immensely supportive implementing the custom duty of five per cent on imports of steel rebar and wire rod, helping the local steel producers to offer their products with the best quality and on competitive prices."
"However, the rebar imports continue to create an imbalance to operate heavy industries, impacting economy of the region. The UAE has a combined capacity to produce five million tons of steel rebars annually, which is more than sufficient to meet current demands of the country needing 3.5 to four million tons annually," Mr. Bhatia added.
According to him, using local products is the way forward, since it spreads positive sentiments across. "For example, steel is a key construction commodity. If all stakeholders in the construction industry promote using local rebars, it will endorse National Industries which add to the country's GDP and also create more job opportunities," he said.
Mr. Mohammed Salem Al Afari, Vice-President Marketing at Emirates Steel Industry, a subsidiary of Senaat, said, "All steel manufacturers in the UAE are facing the challenge with the inflow of cheap steel in the local market imported from Turkey, albeit the domestic steel mills have sufficient capacity to support the new wave of infrastructure developments planned up to 2020. If the traders only consider buying from local producers, the prices can be maintained competitively."
"If we compare prices of finished rebar product and raw product, the price gap is shrinking as it causes increase in production cost while diminishing the profit margin. This is in addition to the selling prices of rebar coming under pressure when the traders import cheap products predominantly from Turkey." he added.
Dr. Ramzi Al Halasa, Advisor & Board Director, Hamriyah Steel in Sharjah, said, "Our purpose is to invite the Government's attention to this key issue happening in the UAE Steel Market. The announcement of major landmark projects across the country had signaled a boom in the steel industry, and the capacity and technologies to cater to this requirement are in place operational. But this positive indication is currently hindered by the flood of cheap steel in the local market imported from countries like Turkey and China."
Mr. Omar Al Mashhour, General Manager, Union Iron & Steel Company in Abu Dhabi, said, "It was real pleasure to meet all the mainline domestic steel manufacturers and raise the key market issue to the Ministry of Economy. Such meetings keep the steel market efficient in the UAE and meet the domestic, regional demand, balancing the supply and demand equation. The market is promising in the next couple of years as we foresee a good demand for our products for the ongoing projects in the UAE, especially the projects related to infrastructure development to host the World Expo 2020 in Dubai and the FIFA World Cup 2022 in Qatar."
Construction companies, developers and traders need to turn to the locally manufactured, labelled as 'Made in UAE', since steel products which are more reliable than imports that usually take minimum of 30 days to arrive in the UAE.
Speaking after the meeting, the Ministry of Economy' representative emphasized that several decisions were taken by the Council of Ministers upon recommendation of the Ministry of Economy with the view to encourage using made in UAE product and reflecting a strong support to promote the industrial sector that will eventually contribute to the growth of UAE Economy. In fact, the Council of Ministers' decision No 85/4w/2 of 2015 issued the common rules for giving a price preference of 10 per cent in governmental procurements to domestic products as compared to foreign products. Additionally, in relation to the steel sector, the Council of Ministers for development issued its decision No 24/2t/2 of 2016 with the main objective to discourage consultancy offices from requiring the use of foreign steel when preparing the tender documentation for construction projects. It is also very important to recall the Council of Ministers Decision No 55/4w/3 of 2016 establishing the Industrial Coordination Council in the UAE which will work in close partnership with all industries to hear their concerns and translate them into plans and strategies to promote the UAE industrial sector based on the great importance placed on industry by the directives of the UAE top leadership.
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© Press Release 2016
