October 2004

SABIC's Metals SBU has planned to expand its operations and increase production capacity to meet the rapidly increasing domestic and global demand for its products. As part of its expansion plan, SABIC recently awarded a large-scale contract for the expansion of its hot-rolling steel mill to Voest Alpine Industrieanlagenbau.

The expansion will take place at the Saudi Iron and Steel Company (HADEED) - SABIC's wholly-owned metals affiliate - based at Jubail. This expansion will double SABIC's flat steel production capacity from one million to two million mt/y. The completion of expansion works is scheduled for 2006.

The turnkey contract includes slab yard and coil yard expansion; a second reheating furnace; a sixth finishing stand; a second downcoiler; and skin pass mill automation system. The expansion will cement SABIC's position as the leading metals producer in the Middle East.

HADEED started production in 1983 with an initial annual production capacity of 800,000 metric tons. Since its formation, annual production capacity has increased, reaching 3,900,000 metric tons of finished products in 2003.

HADEED produces Long Steel products such as Reinforcing Bars, Wire Rods and Sections for the Kingdom's construction industry. In 2003, SABIC approved a project for HADEED which will produce an additional 500,000 mt/y of Rebars and Wire Rods.

Long Steel Products: Long Steel products include Reinforcing Bars, Wire Rods and Light Sections and are mainly used for the construction and fabrication industries. Some of the notable landmarks in the Middle East built with SABIC steel include the Kingdom Center, Al-Faisaliah Tower and SABIC's new headquarters in Riyadh; and the Emirates Towers, Burj Al-Arab and Jumeirah Beach Hotels in Dubai.

Hot rolled, Cold Rolled and Galvanized Flat Steel Products: These products are used in a wide variety of construction applications such as pre-engineered steel buildings, warehouses and industrial plants, and in the manufacture of steel pipes for gas and oil industries. Other uses include water pipes, tanks and oil  drums, containers, auto-body-parts, air conditioning, refrigeration units and household appliances.

© Saudi Commerce and Economic Review 2004