Gulf finance turns attention to steel

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JANAHI: HadeedMENA will supply a broad range of steel products.

Gulf Finance House (GFH) is setting up a new steel production firm, in another to bid to capitalise on booming construction markets in the GCC.

HadeedMENA aims to deliver around eight million tonnes of steel per annum over the next four years, with capacity rising to 12 million tonnes p/a eventually. The Middle East faces a chronic shortage of steel that has pushed up the cost of construction projects.

GFH has joined up with Emirates International Investment Company, Khaleej Development Company (KDC), Q-Invest and Gulf Organisation for Industrial Consulting to launch the new operation.

Essam Janahi, GFH chairman, said: "We intend to differentiate ourselves by taking a ‘top to bottom' approach to the value chain. It will focus both on upstream production for steel billets as well as the downstream manufacturing for steel re-bars and structures."

Gulf Finance House, a Bahrain-based Islamic investment firm, has established a number of new ventures that aim to tap into regional demand for oilfield services and construction materials.

First Energy Bank, an energy-focused investment bank, was formed last month and has announced the formation of a new US $3 billion offshore drilling and services company, MENAdrill.

Launched with the backing of ADWOC and with advice from PFC Energy International and Noble Denton, MENAdrill aims to be on of the leading drilling services firms in MENA and Asia.

MENAdrill will focus on offshore exploration and development drilling in the GCC, North Africa and South East Asia. The company aims to have over 20 rigs operating within three to five years and is negotiating to acquire a ‘leading drilling' company with a number of rigs at work and under construction.

Another venture backed by Gulf Finance House, Cemena, aims to become one of the largest producers of cement in the MENA region.

For the second quarter, GFH posted profits of US $104 million, up 41% from the same quarter last year. Half year 2008 profits stood at US $220 million, up 51% year on year. GHF said revenues were boosted by fees earned from Energy City Libya and venture capital activities.

Peter Panayiotou, GFH's acting chief executive, said: "We have worked hard to implement the strategy set last year and achieve the deal volumes and earnings targets that the Board set. Our investment philosophy is simple. At all times we look for opportunities to create value: we do not rely on market movements alone to generate returns."

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