Sliding demand is forcing Zamil Steel’s structural steel division (ZS-SSD) to cut production this year following on the heels of lower production in 2007, a company official says.
“Demand is down because many projects have been delayed due to rising raw material prices and the fallout from the global financial and economic crisis,” he said.
Figures released by the division said output from the ZS-SSD Dammam factory was 53,487 tonnes in 2006 and 52,560 tonnes in the next year. The first-half 2008 production was 22.937 tonnes, and with conditions unlikely to improve much, the prospects of matching last year’s production are dismal.
A bright spot was the penetration of new markets with ZS-SSD winning orders from parties in Pakistan and Syria.
Ayman Kanaan, general manager of the division had estimated in the second half of 2007 that demand for structural steel in Saudi Arabia was 180,000 tonnes annually, while demand in the GCC region was 470,000 tonnes. Growth in demand was put at five per cent for both
The division has built a factory in Abu Dhabi but production is still to commence. Capacity there is 30,000 tonnes annually.
Kanaan said it was focusing on the petrochemical and oil and gas markets that form “a substantial growth prospect for the steel fabrication business from which a majority of our clients come.”
In the next two years, ZS-SSD would grow through strategic investment and open new markets and increase sales volumes, Kanaan said.
“The division would also focus on innovation and strive to provide products of the best quality at competitive prices, meet customers’ delivery schedules and provide good customer service and support,” the official said.
In recent years ZS-SSD set up a process equipment factory it considers one of the major company developments. Within the division’s facilities are state-of-the-art CNC beam sawing, drilling and coping lines as well as CNC plate processing for structural steel, and plate rolling of up to 150 mm for process equipment. This, the company says, gives the structural steel and process equipment factories an advantage over other fabricators. In addition, the factories’ covered area in Saudi Arabia was increased from 73,500 sq m to 282,000 sq m.
Among projects the division has supplied to are Aramco’s Qatif facilities and Khursaniyah.