LONDON, 3 June 2006 -- Khuzestan Steel Company said on Thursday that it had signed an agreement for export of 150,000 tons of steel ingots to Saudi-based UGS.
Company Deputy Managing Director Bahman Tajali said that the deal was valued at $70 million, which was signed on the sidelines of the Khuzestan province exhibition held in Dubai. UGS is the second biggest steel producing company in the Kingdom.
Tajali also said the Khuzestan Steel complex produced about 2.2 million tons steel, of which 920,000 tons were exported last year.
He also reckoned that with the increasing domestic demand exports would fall to 700,000 tons this year. The company exports its products to China, Taiwan, Indonesia, India, Saudi Arabia, Kuwait and Britain.
Also, he added, some other Arab nations including the UAE and Oman have shown interest in purchasing steel from the company. The company managed to raise its output to 2,150,000 tons in the year that ended on March 20. It exported 820,000 tons of products for $355 million last year.
The exports are up 15 percent in weight and more than 200 percent in value compared to the previous year. The company is one the most active raw steel production entities in the sector. Iran produces only eight million tons per year and has to import five to six million tons annually.
Steel production target has been set at 14 million tons and could top 25-30 million tons with the implementation of the country's development plans.
Iran's private sector holds a share of more than 10 percent in steel production and the figure is expected to rise further. Also, in the next two years, the private sector's share is slated to rise to about 50 percent or 10 million tons. The private sector is also estimated to produce 60 percent of its needed unprocessed steel in the next three years.
© Arab News 2006
