USGME’s steel coil slitting facility

USGME’s steel coil slitting facility

Slitting centre a profitable solution

USGME’s decision to diversify into steel coil slitting paid off, the output serving both its core business and customers in the vicinity of the plant

01 June 2013

Headquartered in Dammam, Saudi Arabia and with a sales and distribution network across the region, USG Middle East (USGME) is a joint venture between USG - a US-headquartered global manufacturer of building materials for the construction and remodeling industries - and a group of Saudi investors.

The company has, in the last 35 years, established a proven track record in Saudi Arabia and the GCC for its suspended ceiling systems, installed in commercial and residential projects across the GCC, including King Saud Bin Abdul Aziz University for Health Sciences, King Abdullah University of Science & Technology and Princess Nora Bint Abdulrahman University in Saudi Arabia, Dubai International Airport and Burj Khalifa in Dubai, and Cleveland Clinic Abu Dhabi.

In June 2012, USGME took the strategic decision to diversify its portfolio of services, establishing a Steel Coil Slitting Centre at its base in Dammam’s Second Industrial City. One year on, it is providing high specification slitting services to a growing customer base across the Eastern Province.

“The new slitting centre, while not a core business, was set up as part of USG’s commitment to upgrading and diversifying the group’s Middle East capabilities, and serves both the company’s internal requirements but also those of customers in the vicinity,” says Fares Saghbini, USGME’s general manager.

Saghbini says the decision to invest in a technologically-advanced slitter from the US was centred on USGME’s
quest for a better quality end product and less waste.

“Prior to June 2012 we would send our master coils to a specialist slitting firm in Riyadh,” he explains.

“But rejection (waste) rates were unacceptably high. With steel costs at some $800 per tonne at present, that becomes an important factor. And we were unwilling to compromise on quality. Transport costs and times also prompted us to look at alternatives.

“By establishing an internal slitting capability, we are controlling quality and mitigating high costs, to the benefit of both USGME and third parties.”

According to Mann Zeaiter, the plant manager at USGME’s Dammam factory, the slitter equipment has the capacity to process approximately 100,000 tonnes of steel coil every year.

“Because we use the machine for our own internal purposes, customers can be confident in the consistent quality of our slitting service,” he says.

Saghbini: controlling quality, mitigating

“The slitter can cut down trimming waste to 3 mm on each side on a 1,000 mm wide coil – improving on the minimum achievable width of 5 mm on either side of our competitors in Saudi Arabia,” he explains.

Saghbini says the slitter service reflects USGME’s philosophy of finding long-term solutions rather than short-term fixes.
“If we encounter a problem, as we did with the quality and cost of the steel coil slitting services we were receiving before June last year, we look for a long-term solution. Today, USGME’s Slitting Centre is a profit centre in its own right, and complements our core business well,” he says.

The slitting centre can, says Zeaiter, also store up to 20,000 tonnes of master coils on behalf of third-parties in the area, adding further value for customers.

USGME’s slitting service is the latest in a line of projects and services introduced by the ambitious company.

Looking ahead, Saghbini says plans are afoot to set up a gypsum board manufacturing facility in Oman using locally quarried raw material, while in Saudi Arabia USGME is gearing up for a major project at Saudi Aramco, which is planning a major energy efficient housing construction programme.

“In 2012 USG entered into a partnership with General Electric (GE) Lighting to manufacture a new integrated ceiling and lighting system which uses just 20 per cent of the energy as a conventional system,” he claims. “As an approved vendor to Saudi Aramco, we look forward to reinforcing our links with them,” he concludes.

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