Saudi Arabia’s steel manufacturers and the government must work together to ensure the competitiveness of this strategically important sector of the economy, a key steel industry body has said.

Saudi Arabia is a major steel importer while more than half of its manufacturing capacity remains unutilised, lamented the National Committee for the Steel Industry (NCSI). Saudi Arabia is the 18th largest steel producing country globally and the largest in the Arab world.

Saudi Arabia’s leading steel manufacturers took the stage at the 13th Arab Steel Summit last month to discuss how the government and private sector can work together to ensure the future competitiveness of one of the nation’s most strategically significant industries and how it could greatly contribute to the success of Vision 2030’s economic development agenda.

The NCSI sponsored a dedicated one-day strategy conference at the annual Arab Steel Summit held in Amman, Jordan.The event spotlighted both the current and potential future economic impact of Saudi steel producers as well as serious threats to an industry.

“We established NCSI under the guidance of the Council of Saudi Chambers to recognise the importance of ensuring the future impact of a strategic industry that plays a crucial role in diversifying non-oil sources of income, the main objective of the Saudi Vision 2030,” said Dr Sami Al-Obaidi, chairman of Council of Saudi Chambers.

“The Arab Steel Summit was an important platform for us to start to address the current challenges our industry faces,” said Engineer Rayed Abdullah Al-Ajaji, NCSI chairman. “Despite the fact that so many of our manufacturers are producing at less than 50 per cent capacity due to unfair competition, as a country we are a net importer of steel.”

Al-Ajaji added Saudi Arabia is losing billions of dollars due to the unfair competition. “We have an opportunity today to work together to stop that and keep this revenue in the country to help achieve our ambitious national growth plans. The steel industry is strategically important to our economic future. Our country has invested billions over the years in world-class facilities that manufacture the highest quality steel products and we must work together to ensure it remains competitive and thriving.”

NCSI reports that the Saudi market requires more than 20 million metric tonnes of steel products to meet the current domestic demand, a number that will continue to increase as more Vision 2030 development and infrastructure projects come online. However, approximately 55 per cent of that total domestic demand is supplied through imports, while actual production has dropped to less than 50 per cent of the capacity available due to unfair competition.

“The objective of NCSI and the Council of Saudi Chambers is to work with our government partners to activate and enforce common standards and rules that help ensure a level playing field for Saudi companies to best compete in both domestic and international markets while improving overall safety standards,” said Mohammed Al-Jabr, NCSI vice-chairman. “In doing so, we have the opportunity to become a model for the country to implement fair and reciprocal trade that reflect best international practices,” he added.