MUSCAT -- Al Jazeera Steel Products Co SAOG, which posted a solid 59 per cent jump in profit during 2011, is seeking to boost its international presence through enhanced exports to Asia, Europe, Australia and the Middle East, among other markets.
"The firm is also looking to enhance its presence in markets like Saudi Arabia, North Africa, Asia, Australia and Eastern Europe for its tubular as well as Merchant Bar Mill (MBM) products, for which a start has been made in 2011. Externally, we are working on expanding the distribution of the MBM products and gaining new territories for our tube mill. We are looking at Africa and Iraq as new areas for growth," Chairman Sulaiman Mohammed Shaheen al Rubaie, stated in a report of the company's financial performance during 2011.
Burgeoning construction and infrastructure investments in the GCC, particularly Qatar, augured well for Jazeera Steel, Al Rubaie stated. "Even though the fourth quarter has been challenging as the commodity markets worldwide took a beating, there is much reason for optimism.
There is overcapacity everywhere, but there remains room for growth for steel manufacturers in the GCC due to the number of infrastructure projects coming up across the region. We expect the construction activities to accelerate further due to the increased government budget surpluses and spending in infrastructure activities. In addition, demand for steel products in Qatar is expected to significantly increase, with the large construction projects lined up for the 2022 World Cup."
At the weekend, the Sohar based steelmaker announced a 59 per cent rise in profit, which jumped to RO 3.030 million in 2011, up from RO 1.903 million a year earlier. Total revenues soared 40 per cent to RO 91.196 million, from RO 64.912 million in 2010. In volume terms, sales climbed 27 per cent to 263,435 metric tonnes in 2011, from 207,261 MT a year earlier. Production also rose 26 per cent to 266,991 MT last year, from 211,647 MT in 2010.
Al Rubaie attributed the higher profit to the management's cost optimisation initiatives and effective overhead management.
"Diversification of raw material suppliers has helped the company reduce concentration risk and control inventory holdings. As a result, this positively impacted borrowings and significant savings were achieved on interest and financing cost," he said.
Al Jazeera's tube mill marked another strong year, with sales volumes increasing 10 per cent over 2010 sales. "One of the main factors fuelling Jazeera Steel's optimism is the performance of its merchant bar mill (MBM) unit, which managed to break even in 2011 within two years of starting commercial production.
Annual production at the MBM unit was ramped up by 66 per cent to over 100,000 MT in 2011 and Jazeera Steel is now targeting a production of more than 125,000 MT for 2012 at the unit."
Projects in the pipeline include like steel making for billet manufacturing and an additional slitting line to manufacture smaller angles and channels from hot roll material along with cut-to-length sheets and plates.
© Oman Daily Observer 2012
