A company in Bahrain plans to become the Gulf's major supplier of a critical industrial material.
Bahrain Ferro Alloy (BAFA), with its major plant in Hidd, Bahrain, has secured an $8 million (Dh28.8 million) murabaha instrument for new capital equipment.
Amlak Finance, in partnership with Emirates Islamic Bank, provided the instrument. It will be used to buy equipment, such as smelter furnaces, for the Hidd plant.
When completed, the plant will annually supply 60,000 metric tonnes of ferro alloy, which will be used to produce crude steel. Production is expected to commence early next year.
"We are proud to coarrange this murabaha facility with Emirates Islamic Bank for BAFA. BAFA is well positioned to be a major provider of metal products in the region," Hussain Al Meeza, board member of Amlak Finance, said at a ceremony to celebrate the loan.
"This deal shows our vote of confidence in BAFA's growth prospects," Al Meeza said.
The Gulf region's recent construction boom has increased demand for various ferro alloys.
For instance, demand for ferro silicon is conservatively estimated to be about 555,000 tonnes per year for the region. Ferro silicon is used to produce around 30 million tonnes of crude steel per year.
More than 80 per cent of the ferro silicon used in the region comes from foreign sources.
The deal will provide significant support to BAFA, which anticipates demand from key regional producers of crude steel Dubal, ALBA, Hadeed and Qatar Steel.
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