Saudi based Al Rajhi Steel Industries Co said on Monday it has obtained a $196.5 million bank loan to more than double its steel rebar production by the start of 2012.
The sharia compliant loan from Saudi Arabia's Alinma Bank will help finance the construction of a 1 million tonne per year steel rebar plant in the Red Sea port city of Jeddah.
This will raise Al Rajhi Steel's annual steel rebar production capacity to 1.8 million tonnes, company spokesman Ibrahim al Malik said.
He said: "The plant will cost $266.6 million which will come from Alinma's loan and Al Rajhi Steel's own resources. The Jeddah plant will be the biggest rebar steel plant in the Middle East and North Africa."
Italy's Danieli was awarded last year a contract worth $213.3 million to build the plant for Al Rajhi Steel, one of Saudi Arabia's three largest steel companies.
Al Rajhi Steel is owned by Mohamed Abdulaziz Al Rajhi & Sons Industry Holding which announced about a year ago an agreement with Banque Saudi Fransi for a $719.9 million financing for a $1.06 billion expansion of its Saudi steel operations.
The firm competes with state controlled Hadeed - which covers about 62 percent of the kingdom's steel demand - and Al Ittefaq Steel Products Co. (Reuters)