Emirates Steel, the largest integrated steel producer in the UAE, has commissioned Phase 2A of its expansion program, 33 months after the launch of its construction activities. Phase 2B will be commissioned by the end of the year, the steelmaker announced yesterday.
The Company, a subsidiary of General Holding Corporation (GHC), launched in January 2006 a two-phased expansion program worth US$ 2.45 billion. Phase 1 was completed in June 2009 at a cost of US$ 816 million, increasing its rolling output capacity from 750,000 tons to 2.1 million metric tons per annum (MTPA).
Emirates Steel’s Phase 2A, which consists of a 1.6 million MTPA Direct Reduction Plant (DRP) and a 1.4 million MTPA Steel Making Plant (SMP), has significantly increased the Company’s DRI (Direct Reduced Iron) capacity to 3.2 million MTPA and steelmaking capacity to 2.8 million MTPA. This elevated Emirates Steel into one of the largest DRI producers in the Middle East region.
Phase 2 DRP and SMP, which are twin plants of Phase 1 assets, were commissioned on schedule in March 2011, thereby significantly reducing the associated technology and construction risks and providing significant synergies to the Company in terms of the learning curve. Cold commissioning of both plants had commenced in October 2010.
The casters of Phase 1 and Phase 2A are different though. The second produces beam blanks, which will eventually provide feedstock to Phase 2B’s one million MTPA Heavy Sections Mill (RM4), due to be commissioned towards the end of 2011. Before RM4 becomes operational, Phase 2A’s Continuous Casting Machine (CCM) will produce Billets, which will be rolled in the existing bar and wire rod mills of Phase 1.
More than 450 Phase 2A workers received training before commissioning. A total of 81 courses were organized, of which 66 have been completed up till now. Nearly 2,400 Emirates Steel and contractor employees worked on Phase 2A throughout the project period.
According to CEO Mr. Gregor Munstermann, Emirates Steel’s focused and fast-paced approach to growth has allowed the Company to edge ahead of schedule in its expansion plan, bringing the company increasingly closer to realizing its final objectives.
“Both the expansion plan and overall growth strategy of Emirates Steel are in line with the Government’s long-term plans for the development and diversification of the Emirate’s economy. The expansion is also part of the overall backward integration plan, which will ensure a competitive market position for Emirates Steel,” he said. The plant’s new facilities together with its planned further expansions will see Emirates Steel increase its production to around 6.5 million tons per annum within the next four years.
“In support of Abu Dhabi Economic Vision 2030, the expansion is designed to give Emirates Steel a competitive advantage over its international competitors by giving it better access to local energy resources and utilizing state-of-the-art technologies. Once Phase 2B is complete, we will be the only producer of jumbo and heavy sections in the MENA region and will be able to offer drastically-reduced lead times and an improved product offering in terms of piece count and cut-to-length services,” Munstermann added.
“The growing number of projects in the GCC working on developing infrastructure, industrial plants, power transmission towers, bridges, sea ports and high rise towers all require the new products we will be able to supply in large numbers once the expansion is complete,” Munstermann pointed out.
Commenting on the company’s Emiratization drive, Engineer Ahmed Al Dhaheri, Projects Vice President, pointed out that “more than 30 per cent of the project team members, who worked on the two-phased expansion, were UAE engineers”. He asserted that “emiratization is one of our highest priorities and we remain dedicated to contributing to this important government initiative”. Meanwhile, once the expansion is complete, an estimated 2,000 more jobs will be created in the country either through downstream operations or by suppliers.
“At Emirates Steel, we have our reasons for being optimistic about our expansion projects,” asserted Al Dhaheri. Besides construction, other factors are contributing to the growth of the steel industry in the country. These include cheap and reliable gas and energy supply, growing investment in the oil & gas and petrochemical sectors, industrial growth and rising income level.
“This does not mean that demand for steel has not contracted on account of the global economic crisis; a number of projects have been placed on hold or cancelled, but construction projects, mainly in Abu Dhabi, are currently the key driving force behind the steel industry growth. This trend and other government initiatives will play a critical role in promoting reforms and increasing competitiveness of our steel industry in the coming years,” Al Dhaheri pointed out.
“Whilst the original business model was relatively simple, a re-roller of imported steel billets, today Emirates Steel operates a complex integrated manufacturing plant using modern solutions to tackle traditional industrial problems to generate value for its various stakeholders,” added Al Dhaheri.
“We have implemented a strict environment monitoring plan to ensure full compliance with local regulating authority and international standard requirements using best applicable technology. A Continuous Emission Monitoring System (CEMS) has been installed to ensure that plant operations are well within regulatory limits,” he pointed out. Up till the end of February 2011, 12.4 million man hours had been achieved with a Lost Time Injury rate of 0.008. “This is in itself a major accomplishment that was achieved by setting safety and housekeeping standards in line with best international practices,” he asserted.
“Once finalized, Phase 2 will complete the vision of Emirates Steel with regards to Long Products and high quality construction steel in the GCC region,” Al Dhaheri concluded.