Emirati, Saudi and Omani investors have announced a new joint venture to build a steel plant in Oman with a total capital of $400 million. The announcement of the joint venture - named Dhofar Steel - was made Sunday at the end of the Gulf Partnership and Investment Forum in Salalah, Oman. The shareholders include Al Suwaidi Group, Al Tuwairqi Group and Salalah Development Company. The plant will produce one million tons of steel a year and will provide 1,200 job opportunities to mainly Omani citizens. The Middle East steel industry started off on a positive note from the beginning of this year with demand for the metal picking up as industry experts project 15 percent growth on the back of rising requirements from the UAE, Saudi Arabia and Qatar. Asim Siddique MD for Age Group in Dubai said that the main opportunity for steel traders in the GCC market arises from catering to the heavy supply demands that are the consequence of high expenditure in infrastructure development which is fuelled, by high oil prices and population requirements. The UAE industrial sector expanded by nearly 11 percent in 2011 while in Saudi Arabia, $384 billion plan for infrastructure and industrial projects has been announced. Steel demand in the UAE has soared in the past few years in the backdrop of continuing infrastructure projects cheap and reliable gas and energy supply, growing investments in the construction industry and other core sectors. The country is therefore witnessing an unparallel development and revolution following the extraordinary growth in the construction and infrastructure industry. According to a recent research report, demand for steel products have surged immensely over the past few years, backed by construction boom, growth in the real estate investment and rising income level. The apparent consumption of finished steel products is expected to reach more than eight million metric tons by 2014 end. Industry experts however claim that the UAE steel industry in the past has been highly import oriented. Steel imports grew around 15.5 percent to about 6.7 million tons in 2010. With the reduction in import tariff by the GCC, imports of steel are expected to increase in the years to come. However, some major expansion plans of steel players in the country will increase domestic steel output further. According to a top official of Sharjah Chamber of Commerce and Industry, Sharjah, the industrial capital of the UAE expects to achieve up to 5 percent industrial growth in 2012 compared to last year. The Emirate's manufacturing sector contributes more than 35 per cent of the country's total production. Last year Sharjah achieved AED21 billion industrial productions, so it's expected to achieve AED 22.1 billion productions. The Saudi Gazette
