JEDDAH: A major steel plant is being constructed in the Jazan Economic City in the Kingdom's southern region at a total cost of SR10 billion. The plant's first phase will be ready by the end of this year and start production early next year to support the region's construction boom.
"This is first such project in the southern region," said Faiz Nasser Al-Dossary, executive director of South Steel. He disclosed plans to establish a number of related plants inside the complex.
"We have completed the first phase of the project covering a million square meters at a cost of SR1.3 billion," Al-Dossary said, adding that its steel mill would produce a million ton/year of steel billets and 500,000 tons of rebar. The company is owned by Pan-Kingdom Investment and Qatar Steel Company.
The project is being implemented by South Korean STX group, which has established steel plants in many countries. STX Heavy Industries provides full-scale engineering and construction services for rolling mill plants, especially for long products such as round bars and rebars.
Saudi Industrial Development Fund (SIDF) is the major source of funding while the balance has been raised from commercial loans and share capital. Major shareholders are PKI, with Qatar Steel also having a substantial holding. Other investors include Dubai Investment, Al-Jedaie Group, Hamed Bin Hamed Al-Mutabakani.
The plant comes ahead of an expected big construction boom in the southern region, the company said in a statement. The project is geographically located near neighboring and consuming countries like Yemen and North African countries.
South Steel will produce steel through the EAF-CC route, and therefore, depend on import of raw materials like DRI/ HBI & steel scrap. It will supply 1 million tons of liquid steel, 1 million tons of billets of sizes 130x130 mm sq. and 150X150 mm sq, at casting speeds of 4.5 and 3.8 m/min respectively, and 0.5 million tons of construction quality rebars.
South Steel's five-year plan includes construction of a new rolling mill by 2012 to supply 0.5 mt of rebars, a Cut-to-length & Bending Process Unit to process 100,000 tpa, & an Epoxy coating unit to process 60,000 tpa at a total investment of SR450 million.
The plan includes construction of a new melt shop of 1 million tpa to produce billets, rebars and rods at a total investment of SR1.6 billion by 2014.
A palletizing plant to produce 6 million tons of green pellets and an Iron Ore Hub to handle 12 million tons to produce billets, rebars and rods at a total investment of SR2 billion by 2015, the company said. Beyond 2015 it intends to establish a new melt shop and DRI plant to produce 1 million tons of slabs and blooms, 2.6 mta of DRI a total investment of SR4 billion.
© Arab News 2011
