• Products exported to 40 countries with domestic market share of 60%

  • 21% emiratization across the company, with UAE nationals leading 75% of executive management

Abu Dhabi: Emirates Steel, a subsidiary of the General Holding Corporation (SENAAT), today announced an outstanding set of financial results for the year 2017.

  • AED 6.6 billion in revenues achieved in the year, an increase of 22% compared to AED 5.4 billion in the previous year.

  • A solid 12% EBITDA margin; delivered in a challenging year for the global steel sector

  • Production increased to more than 3.2 million tons by the end of the year, up from 3.1 million tons in 2016.

  • Export sales accounted for 20% of total volumes, with the remaining 80% being consumed within the UAE.

  • Domestic market share: 60%

  • The Debt to Asset ratio at 29%

During an annual media briefing held today at Emirates Steel’s headquarters, H.E. Engineer Saeed Ghumran Al Remeithi, Chief Executive Officer said: “The positive results achieved by Emirates Steel in 2017 clearly indicate success of the company’s resilient business model, despite the challenges faced by the metals and steel industry globally.

“The increasing demand for Emirates Steel’s products in the international markets is testament to their high quality, which will open further doors for entering new emerging and developed markets. We will continue to increase sales revenues and reduce direct and indirect costs to further improve the company's financial performance. This will be achieved by increasing volumes, driving efficiencies and further developing our product range to achieve our production capacity of 3.5 million tons per year, raising safety standards and entering new markets to further expand our global footprint,” he added.

“Having delivered year on year growth, the company continues to enhance its position as a world class steel manufacturer, providing the highest quality products, services and solutions to our customers.”

Production performance and sales strategy

Emirates Steel has recently developed a scrap shredding facility that supports increased efficiencies in the operation of the electric arc furnaces. This new facility will play a major role in re-cycling scrap metal available in the Emirates, as well as reducing operating costs and increasing flexibility for the primary feedstock used by the company.

In addition, the company has successfully designed and developed a twin-casting system, the first of its kind in the UAE, that will enable the company to further increase volumes. The success of this new technology was confirmed on commissioning in July 2017, as it had increased the production capacity of “Steel Casting 2” to 20%

“Emirates Steel continues to focus on manufacturing high quality steel products to meet the needs of a growing construction market and the huge infrastructure projects ongoing in the UAE and the GCC. Our heavy structural steel sections are used in the construction of bridges, roads, giant residential towers, airports, ports and in the construction industry for industrial and engineering applications,” said Mr. Al Remeithi.

“We will rely heavily on the heavy sections mill when implementing our expansion strategy, further targeting new markets" he added. “The plant was commissioned in 2013 with production reaching 540,000 tons per annum in 2017.”

Al Remeithi added: “In addition, the company has continued to produce rebar and increase its production to 2.2 million ton per annum in 2017, compared to 2.1 million ton per annum in 2016”

The company is currently diversifying its product strategy with the development of value added products such as specialist steel wire rods as used in a diverse range of applications - from the automotive sector to the manufacture of furniture. The company's heavy sections team has successfully developed a range of highly technical sheet pile products, the “ES-Z” range as part of Emirates Steel’s development strategy.

Sheikh Khalifa Excellence Award

Last month, Emirates Steel won the Diamond Category of the prestigious Sheikh Khalifa Excellence Award, which was presented by Sheikh Hamed bin Zayed Al Nahyan.

H.E. Engineer Saeed Ghumran Al Remeithi, Chief Executive Officer said: “We’re proud to be the first company in the industrial sector to win this award, which reflects the company’s significant achievements towards developing the local industrial sector.”

Al Remeithi added: “Excellence is a continues journey. Wining this award is a motivation for Emirates Steel to deliver more outstanding services to our customers and further strengthen the company’s position in the UAE and the region.”

Efficiencies

The company has implemented various cost control measures and this, married with the enhanced efficiencies and availability of the plants, has reduced the manufacturing costs per ton of steel (excl. feedstock) by 37% in the period from 2012 to 2017. Similarly the overhead costs per ton of steel has been reduced by 25% in this period. An independent benchmarking exercise conducted by Wood Mackenzie having positioned Emirates Steel as a top quartile player in terms of the world’s most efficient producers.

Emiratization

21% of Emirates Steel workforce is representative by UAE nationals, with 75% of UAE nationals leading the executive management. The company plans to increase its overall Emiratization ratio to 34% by 2020, providing UAE Nationals with an opportunity to contribute to its growth and to the Economic Vision of the nation.

Currently, Emirates Steel employs 2,228 personnel across all divisions and facilities, with 467 of the them being UAE Nationals, including 76 engineers, 307 technicians and 84 managers.

Corporate Social Responsibility

In line with its CSR commitment, Emirates Steel has implemented a number of initiatives to engage with the community and add value to the society.

'We Give You Smile', an initiative designed to help improve the quality of life for needy people, has been running for two years, benefiting 60 families in 2016 which increased to a total of 140 in 2017. In line with the spirit of unity, the company engaged its staff to distribute packed boxes of essential food items to families across the country.

In cooperation with the UAE Red Crescent, Emirates Steel actively contributes to campaigns that aim to support orphans and refugees.

This year, the company is also supporting the “Year of Zayed” initiative as led by His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE.

Mr. Al Remeithi commented: “Emirates Steel is continuously seeking opportunities to join hands with governmental and non-governmental institutions for cooperation towards further contributing to UAE’s socio-economic and community development.”

-Ends-

About Emirates Steel

Emirates Steel is owned by SENAAT, the UAE’s largest industrial conglomerate and a driving force for implementing the Abu Dhabi government’s industrial diversification policy. Strategically located in the Industrial City of Abu Dhabi, some 35 kilometers away from the heart of the city of Abu Dhabi, Emirates Steel is the only integrated steel plant in the UAE, utilizing the latest rolling mill technology to produce rebar, wire rod and heavy sections.

Established in 1998, Emirates Steel grew in a relatively short period of time from a simple re-roller of imported steel billets to a complex integrated manufacturing plant, using modern solutions to tackle traditional industrial problems to generate value for its various stakeholders. In 2012, the Company began producing at a capacity of 3.5 million MTPA, following two expansions and the investment of around AED 11 billion (US$ 3 billion).

Emirates Steel’s underlying business goal is to be an efficient and competitive producer of finished steel products. To achieve this, the Company continually and significantly invests in expansions in the areas of processing, manufacturing and information technology. In addition, these investments help to improve product and service quality, reduce the Company’s environmental footprint and increase safety for workers and customers.

© Press Release 2018