Privately owned steel products maker Conares expects a significant surge in sales this year and is ramping up production capacity in anticipation of strong demand arising out of new infrastructure projects within the UAE and elsewhere in the region.

Bharat Bhatia, Conares’ CEO, expects sales to grow to 240,000 tonnes this year against 200,000 tonnes in 2012. Demand was particularly high in the second quarter of 2013, up 40 per cent compared with the first quarter. “We managed to get into new markets and developed new supply chains, still keeping to the basic balance of principles of conservatism and aggressiveness,” he says.

Conares now exports some 35 to 40 per cent of its output. Established in 2001, it operates a plant in Jafza and invested more than $150 million in the steel industry.

The company has more than tripled its production capacity in the last 10 years and is a leader in the production of rebars of 8 mm to 40 mm and pipes and tubes of half inch to four inches. Conares’ current production capacity of 750,000 tonnes per year will be expanded to a million tonnes by the end of 2015. Its current combined plant utilisation is 65 per cent with pipe mill capacity at 40 per cent, galvanising capacity at 100 per cent and rebar capacity at 60 per cent.

Capacity at the galvanising mill and the range of the pipe mill will be expanded. Conares says it does not currently have any plans to expand outside the UAE as markets can be accessed easily from its Dubai base. It is exploring opportunities to market its pipes, tubes and rebars in East Europe countries.

The company has targeted a turnover of Dh750 million ($204.18 million) for this year and Bhatia says it is on track to reaching or surpassing the target. Its products are directly related to real estate and infrastructure development. “Conares operates within the flat and long steel product segments with a huge requirement of raw materials, making it key for both global and regional suppliers and giving the company a competitive advantage,” says Bhatia.

“As far as the requirement for rebar is concerned, the UAE market is a pretty much balanced,” he says. “It is estimated to have about 220,000 – 250,000 tonnes demand per month. This is practically covered by the installed capacity of the local producers of about 300,000 tonnes per month. The market is expected to show constant demand pending possible developments that can come into place by the last part of this year.”

According to Bhatia, the UAE steel industry is expected to grow 25 per cent in the current year. Demand for steel in the UAE is estimated at three million tonnes per year and the installed capacity of the markets was also around three million tonnes (by the third quarter of this year) but with the mills having different capacities for different products and types, there is still scope for imports, and traders have been importing from Turkey, deemed as the most competitive market. Installed capacity in UAE plants is expected to reach 3.6 million tonnes by the end of 2013.