Foulath’s Gulf Industrial Investment Company (GIIC), maker of direct reduction pellets in the Hidd Industrial Area, achieved production of 6 million tonnes in 2012, sources told this magazine.

At another Foulath company – United Steel Company (Sulb) – commissioning has been achieved in two of three units. The melt shop of capacity 1 million tonnes and the rolling mill of similar capacity have been commissioned while commissioning is ongoing at the DR plant of capacity 1.5 million tonnes. A date for full normal operations could be set any time during the next several months.

Sulb Saudi Arabia, which was United Gulf Steel Mill before acquisition by Foulath, will reach its full capacity of 400,000 tonnes by the end of next year. Currently there are no expansions underway there. Both Saudi Sulb and Bahrain Sulb will produce light, medium and heavy sections for which regional demand is high with the latter contributing a million tonnes per year.

Workmen at the GIIC plant

Sulb Bahrain plans to have a second phase expansion to raise melting and direct reduced iron capacities and install a rebar mill.

A third Foulath company in Bahrain - United Stainless Steel Company (Usco) – which operated a stainless steel rolling mill, has since stopped production with the stainless steel market remaining low, and the plan is to convert it into a rebars facility to feed ever-growing demand from the infrastructure and construction market in the region. Annual capacity of the new rebars plant is envisaged at 600 to 1 million tonnes.

2012 pellets production would have been higher had GIIC received the committed supplies from its suppliers. Customarily, GIIC buys most of its requirements from Brazil but also imports from Russia and Chile. 

GIIC has annual capacity of 12 million tonnes. It will be able to achieve that level in 2015 when regular raw material supplies from Brazil begin.

GCC AREA GETS MAJOR SHARE
Currently, 70 per cent of GIIC’s production goes to the GCC area with India and the Far East receiving the remainder. Customers in the Gulf include Qatar Steel, Emirates Steel, Shadeed Oman and Al Tuwairqi Group. GIIC hopes to have output of 8 million tonnes in 2014 following assurances from its iron ore suppliers they will be able to step up volumes.

When Sulb Bahrain reaches full capacity, GIIC will be supplying it 2.5 million tonnes of pellets annually. The company’s strategy is to continue being a major player in the GCC region.

Outlook for GIIC is considered very good as steel demand is expected to grow in the wider Middle East and North Africa region. Despite Vale Oman shipping most of its production to the Gulf, and GIIC doing likewise, only 50 per cent of the regional demand is met with supplies having to be imported from various quarters.

Meanwhile, GIIC will begin shipments to three plants in Egypt – Suez Steel, Beshay Steel and Ezz Steel –  in 2013 with volumes steadily increasing from time to time, starting with a total of half a million tonnes in 2013.

A view of the pelletisation facilities

Two planned Foulath pelletisation plants, each of capacity 7 million tonnes per year, will be set up in Egypt once the situation there stabilises. A planned Oman pelletising plant of Foulath, also of capacity 7 million tonnes, will be built when the issue of gas supplies is resolved.

Foulath’s shareholders are Gulf Investment Corporation (GIC), Kuwait, which owns 50 per cent of shares, Qatar Steel Company (25 per cent),  Mohammed Abdulmohsin Al Kharafi & Sons Company, Kuwait, and National Industries Holding Group, Kuwait, (each 10 per cent) and Kuwait Foundry Company, Kuwait (5 per cent).

Its mission is to make the Middle East-North Africa region self-sufficient in steel requirements and towards that end it is investing across the entire steel value chain as part of its mine to metal approach.