*DUBAI : *Hinting at the robust recovery in the domestic economy, India’s steel giants are all out for consolidating their presence in the Middle East region so as to meet the rising steel demand in the gulf and North African region.
In a major step towards this direction, India's Essar group’s steel venture, Essar Steel Ltd is said to be in talks to acquire a mid-sized steel firm in Egypt – Kandil Steel, for which the Indian steel giant is reported to have sent feelers to the latter, a UAE-based news agency, Emirates Business 24x7 reported on Sunday. Kandil Steel makes cold and hot-rolled coil and sheets, galvanised coils and pipes for outdoor, marine and industrial appliances and caters to the Mena and European markets. It plans to reach a capacity of a million tonnes per year in 2010. The Mena region of North Africa and the Middle East countries are reeling under the deficit of steel supplies. According to an estimate the supply shortfall in this region is believed to be at over 15 million tonnes. Having submitted feelers for the acquisition, the Essar group is likely to offer a formal proposal to the management of Kandil in the near future. Additionally, in January this year, Essar had announced its plans to set up a 250,000 tonnes processing and service centre in Jebel Ali Free Zone through its subsidiary Essar Steel Middle East FZE. The unit will serve Essar's expanding regional client base in consumer sectors such as automotive, white goods, consumer, ship building and engineering. As quoted by Emirates Business 24x7, B Sivakumar, Director of Essar Steel Middle East FZE maintained that the proposed facility will be in line with Essar's policy to be closer to its customers. "We have been servicing this market for over a decade now. Establishing a base in the Jebel Ali, one of the regions oldest and largest business hubs, gives us a strategic platform to implement our growth plans in the region," said Sivakumar. Meanwhile, Arcelor Mittal has already bagged a licence to set up steel pelletising plant and billet production facility, costing around $800 million (Dh2,938m) to $1 billion. Looking at the growing housing and real estate sector in the Middle East region, steel production for the UAE, Saudi Arabia and Qatar is believed to rise to 8.45 million tonnes per annum (MTPA) in 2010, up from 6.8 MTPA in 2009. Besides Essar, other Indian steel majors are in the fray to establish their foothold in the Gulf region via fresh investments and inorganic expansion mode. Last month, India's Jindal Steel and Power Limited (JSPL) (BOM:532286) had made a historical leap by acquiring Oman-based Shadeed Iron and Steel Co from the UAE-based Al Ghaith Holdings for an estimated value of $464 million. On the other hand, Jindal group venture, JSW Steel Ltd (BOM:500228) is said to be considering mines acquisition in Middle East with interests in lime stone mines. Meanwhile, SKS Ispat Steel and Power Limited has also joined hands with Dubai Investments Authority for setting up steel fabrication facilities. Steel consumption in the Gulf region especially in the Mena region is believed to rise significantly over the next few years. According to World Steel Association statistics, Mena region will continue to record positive growth in steel consumption for 2010 and 2011 with growth in steel consumption seen rising at 9.5% and 8.4% respectively from the 57.5 million tonnes recorded in 2009. Egypt and Saudi Arabia are expected to be the key markets for steel consumption in Mena region due to increased infrastructure spending by private as well as governments. The region, till recently had been heavily dependent on imported steel to meet their infrastructure requirements. However, with rising capacities in the region, this dependency on imports is seen to come down to a great extent. -- Regards Hardik Shah -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
