Qatar Steel is setting up a new steel plant adjacent to its existing facilities in Mesaieed that will have capacity to produce 1.1 million tonnes of steel annually.

Siemens VAI has received a contract from the steel firm to build the plant which will start production in the first quarter of 2013. A Qatar Steel spokesman did not disclose the value of the project.

Qatar Steel’s existing plant produces about 2 million tonnes of steel per year, the spokesman said.

The company, a unit of Industries Qatar, bought a 20 per cent stake in Saudi Arabia-based South Steel Company in 2010 to meet growing local demand and to supply Yemen and neighbouring African markets.

Qatar, the world’s largest exporter of liquefied natural gas, has been investing in industries other than gas. It launched a $5.7bn aluminium plant in December 2009 which was inaugurated last year.