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Wed 4 Mar 2015 02:27 PM

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UAE, Japanese firms agree $300m steel pipe venture

Abu Dhabi's Senaat will hold 51% of Al Gharbia Pipe Co which seeks to meet demand in construction sector

UAE, Japanese firms agree $300m steel pipe venture

Abu Dhabi's General Holding Corp (Senaat) and a Japanese consortium are jointly investing 1.1 billion dirhams ($300 million) in a steel pipe manufacturing facility, seeking to meet demand in the Middle East's energy and construction sector.

Senaat, a major state-owned investor in Abu Dhabi industry, will hold 51 percent of Al Gharbia Pipe Co while Japan's JFE Steel Corp will own 27 percent and Marubeni-Itochu Steel Inc will have 22 percent.

The facility, at Abu Dhabi's Khalifa industrial zone, will produce 240,000 tonnes of sour grade steel pipes with commercial production expected from 2018. Sour grade pipes are designed to prevent corrosion associated with hydrogen sulphide, a characteristic of offshore operations.

Some 40 percent of the output will be exported, Jamal Salem al Dhaheri, chief operating officer of Senaat, told reporters on Wednesday. Current imports of such pipes in the Middle East are about 1 million tonnes annually, he added.

Senaat is in talks with banks to secure financing for its share of the project. Earlier this week, Senaat said it planned to invest 5 billion dirhams in local industry over the next two years.

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