Abu Dhabi steel giant posts 135% rise in revenue

STEEL REVENUE: ESI has announced a 135 percent rise in revenue so far in 2008. (Getty Images)

Emirates Steel Industries (ESI) has announced its total sales revenue reached nearly $800 million by the end of Q3, a rise of 135 percent compared to the same period last year.

The firm is predicting that demand for steel will continue to grow on the back of the UAE’s real estate boom.

Hussain Al Nowais, chairman of ESI, which is wholly-owned by the government of Abu Dhabi, said its total production to the end of the third quarter of this year rose 43 percent to around 770,000 tons, up from 540,000 tons in the same period last year.

ESI stepped up its annual production to1.8 million tons after it installed rolling mills as part of its first phase of expansion to meet growing demand for iron and steel in local and regional markets.

The firm is investing $4.5 billion in expansion plans as it aims to become the leading steel producer in the Gulf. Currently the domestic market consumes ESI’s entire production of steel.

It signed contracts last year with four international companies, including Brazilian firm Vale, to secure raw materials.

“We currently hold a significant share of the regional market as we were one of the first companies to use the latest technologies and are the only company to operate an integrated steel plant that produces steel products in a range of sizes and qualities to meet the specific needs of end users in the construction sector,” said Al Nowais, who is also chairman of Abu Dhabi Basic Industries Corporation.

Saeed Al Romaithi, assistant vice president of operations at ESI, said over the next four years ESI factories would comprise an integrated industrial complex, unique to the region.

He said it would achieve this by increasing the diversification of production of steel products by expanding beyond the production of reinforced rebar to include other types of product such as wire rod, sections and metal coil.

ESI has begun initial testing of its primary smelting unit and furnaces, and expects actual steel production to begin in January of next year. The unit will have a production capacity of about 1.4 million tons per year.

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