Qatar may be site of $5bn steel project

The project is unique in that it will be located in different parts of MENA with the upstream side to be sited in countries rich in iron ore and coal and the downstream segments are to be located in countries where there is high demand for steel, such as Qatar and other GCC states. Qatar and the UAE, in particular, are in the midst of a construction boom and steel is a key raw material requirement.

The steel-manufacturing company - HadeedMENA -- will have a production capacity of 8m tonnes per annum and at a later stage, production capacity will be ramped up to 12m tonnes.

Islamic investment bank Gulf Finance House (GFH) came up with the idea of the project keeping in mind the shortfall in domestic steel production in the region. The bank has lined up Q-Invest , Emirates International Investment Company and Khaleej Development Company (KDC) as strategic partners. Indian firm M N Dastur Company will be the technical partners to the project and the city-based Gulf Organisation for Industrial Consulting (GOIC) , will be the market advisors to the project. Once complete, the project is expected to serve 15 percent of regional needs.

Prof. Abdul Latif Al Meer, Q-Invest Managing Director said: "Beyond the immediate economic benefits, this kind of initiative has a wide-ranging impact on employment levels and standards of life. Steel production generates a strong piepline of follow-on jobs in engineering, manufacturing, design and support sectors, all of which provide employment and improved standards of living." Esam Janahi, GFH Chairman, said: "We intend to differentiate ourselves by taking a top-to-bottom approach to the value chain. It will focus both on upstream production for steel billets as well as the downstream manufacturing for steel rebars and structures." Final negotiations are going on with reference to the formation of the new entity and partnerships and acquisitions are to be announced in the near future.

Dr Ahmed Mutawa of GOIC said: "GCC economies realise establishing new manufacturing and service capacity will allow them to be far more responsive to their long-term domestic needs. The creation of HadeedMENA is a perfect example of this approach. Instead of being dependent on steel imports, we will now be able to produce this essential product within our own borders."

Ahmed Al Qattan, KDC Vice-Chairman and Managing Director, said the group's plans for the company will give HadeedMENA the competitive advantages required to become a serious regional player. Supriya Das Gupta, M N Dastur Chairman, said the steel plant would make use of the latest technologies and manufacturing techniques by entering into partnerships with steel manufacturers of renown. Figures for 2006 showed the MENA region consumed around 35.5m tonnes of steel products although production only amounted to 24m tonnes.