MUSCAT -- Jazeera Steel says it has awarded a contract for the enhancement of its rebar manufacturing capabilities at its Sohar plant. The project, due to commence commercial production by mid-2014, will boost rebar output by 70,000 metric tonnes (MT). The Merchant Bar Mill will also be operational round the clock as a result from the latter part of the first half of next year, Sulaiman Mohammed Shaheen al Rubaie, Chairman, said in the Directors' Report of the company's financial performance for the first half of 2013. Despite a 14 per cent decline in sales revenue for the period under review, net profit was up 5 per cent to RO 2.942 million this year, from RO 2.792 million during the corresponding period of last year. Total production slipped one per cent to 153,780 MT this year, from 154,818 MT as of June 30, 2012. Revenues slumped to RO 46.670 million this year, from RO 53.960 million a year earlier.
Al Rubaie said the company's overall financial performance was impacted by a number of factors. "Raw material prices were on the declining trend from March 2013. This is mainly attributed to the oversupply and lack of demand. China alone is producing more than 50 per cent of the world's steel production for the first time in history. Due to oversupply, raw material prices were under pressure and had to be reduced. The US market was less buoyant in this period and thus we lost good tonnage to this market and thus the fall in total sales tonnage.
Though the US economy is doing well, oversupply from all parts of the world is keeping the prices under pressure. After the drop due to the previous US anti‐dumping case, we are slowly regaining our US market position and expect to perform better in the second half. In spite of all the above factors, with the efficient inventory management, improved sourcing of raw materials and improved working capital management, Al Jazeera was able to increase its profits by 5 per cent to RO 2.94mn, up from RO 2.79 mn in the same period of last year."
Improved spending by GCC governments on infrastructure has also helped offset the impact of the economic slowdown in Europe on the company's business, the Chairman noted. "Nonetheless, a very cautious approach is being taken by management to protect against any market downturns. A vigilant procurement plan for our raw materials, at the right prices and at the right time, is being monitored on a regular basis," he stated.
© Oman Daily Observer 2013
