RIYADH, Saudi Arabia (June 6, 2000) - Saudi Basic Industries Corporation (SABIC) has decided to shut down the Jeddah Rolling Mill operated by its wholly owned affiliate, the Saudi Iron and Steel Company (HADEED).

SABIC's Vice Chairman and Managing Director Mohamed H. Al-Mady cited several reasons that contributed to the decision. Although the mill had been modernized and upgraded by SABIC more than once, the location of the plant makes it difficult to further upgrade and expand its operation. The unit is located inside a Saudi Aramco refinery complex and its production technology has become outdated compared to new and advanced processes.

Al-Mady said the mill had played a key role in meeting the steel product requirements of Saudi Arabia's western region and HADEED would ensure that supplies are not affected by its closure. The Jeddah Rolling Mill had always obtained steel billets, the raw material to produce reinforcement bars, from HADEED, which is located in Al-Jubail Industrial City.

The Jeddah Rolling Mill, earlier known as SULB (Steel Rolling Company), was established in 1962, and became part of the SABIC Group in 1979. It employs 83 people, including 39 Saudi citizens. The employees will have an option to work at the HADEED complex in Al-Jubail.

Al-Mady noted that HADEED's newly expanded complex in Al-Jubail consists of three rolling mills. The company has an excellent all-round performance record, with increasing production capacity and productivity, high product quality and efficient marketing. It has been able to meet the Kingdom's construction requirements and has also exported its products to other markets in the region.

With the commissioning of its new flat steel project last year, HADEED's total production capacity went up to 2.8 million metric tons per year (mt/y) of reinforcement bars (rebars), sections and flat steel products. Al-Mady said the company was already planning the second stage of the flat steel project to increase capacity to about 4.3 million mt/y. The expansion would further strengthen HADEED's position as the Middle East's leading integrated iron and steel complex.

-Ends-

Mohammad Al-Motawa
Vice President, Public Relations

© Press Release 2005