The local steel manufacturers should increase their production to cater current demand and gradually reduce the market share for the import of steel products in the UAE,
said Bharat Bhatia, CEO of Conares, which operates the Gulf region’s second largest steel plant in the private sector.
Currently, about 60 to 70 per cent of demand for steel rebar in the UAE market is addressed by the local manufacturers and the rest are covered by imports. The UAE rebar market is estimated to have kept a stable demand of about 3.0- 3.3 million ton for the current year.
The huge growth in the steel industry is a result of other factors as well. Construction companies, developers and traders turn to local steel producers due to the reliability of local delivery compared to the imports of debars which normally take a minimum of 60 days to arrive in Dubai.
Supply by local players is far better and easier, compared to imports from outside the UAE and local banks also strongly support the steel industry, he said.
Bhatia said that the steel market in Dubai is currently in a balanced state. The market is expected to grow strongly since a number of new mega projects have been announced.
“Dubai steel market has enough capacity to support the new wave of infrastructure developments that is planned up to 2020. The technologies and capacity to cater to this requirement immediately are in place and operating,” Bhatia said.
“For the steel market in general, the year 2014 started with strong demand. The demand for steel products in the UAE has increased by 15 per cent in 2014, compared to last year. The positive upbeat of the economy in the earlier months of the year, coupled with evidenced liquidity in the market, has reinforced the steel market. We expect the year 2015 would witness more demand compared to the current year. The indications remain promising as projects continue to be moving on, albeit there have been concerns on further liquidity and Asian economic activities to catch up towards the later part of the year,” he added.
Conares, which manufactures and trading steel pipes and steel rebars for both the global and regional suppliers, represents 15 per cent of the UAE market share in their specific product segments. It currently supplies about 350,000 metric tons of rebar, about 10 per cent of the total domestic requirement in the UAE.
The company also supplies approximately 100,000 metric tons of pipes, which is around 25 per cent of the total market demand in the region. Conares, currently, is among the three major steel rebar mills continuously operating in UAE.
Bhatia said the outlook for steel market for the year 2015 looks promising, although the later part of the 2014 slightly affected by the depressing global steel prices.
“But project anticipation keeps the mood to be promising, although some concerns on liquidity started to return in the market. Steel rebar prices have performed in the normal band of price range for the year. It has peaked at $625 from a low of $550 per metric ton, and is currently hovering at about $575 pmt.”
Conares recorded a double-digit growth in the 2014, and recorded an 80 per cent utilization of its capacity. Sales of Conares steel products increased manifold, and profit of the business also registered significant growth.
“Guaranteeing international quality standards, we are in the position to serve the growing demand. We are focused on maximization of the capacity of our rebar mill, in order to meet the increasing demand for steel rebar in the region. The high-demand and order bookings indicate a 100 per cent utilization of our installed capacity,” said Bhatia.
The-state-of-the-art plant of Conares covers an area of over one and half million square feet. It generated Dh1.2 billion annual revenues.
Source: emirates247.com
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