Steel manufacturer’s steely resolve nets record production and revenues
In recently revealed statistics, Emirates Steel, a subsidiary of the Abu Dhabi General Holding Corporation (SENAAT), announced a remarkable slew of financial results for the year 2017.
Highlights include AED 6.6bn (US$ 1.8bn) in sales revenues for the year, an increase of 22% compared to AED 5.4bn (US$1.47bn) attained in the previous year 2016. The EBITDA (earnings before interest, tax, depreciation and amortization) margin stood at a healthy 12% despite prevailing challenges in the global steel sector.
Meanwhile, production increased to more than 3.2mn tons by the end of 2017, up from 3.1mn tons in 2016. Export sales to over 40 countries internationally accounted for 20% of total volumes, while the remaining 80% was consumed in the UAE. Emirates Steel maintained its leadership of the domestic market with a whopping 60% market share.
At the annual media briefing held at the Emirates Steel’s headquarters in the Industrial City of Abu Dhabi in Mussafah on the outskirts of the UAE Capital, Engr. Saeed Ghumran Al Remeithi, Chief Executive Officer, was upbeat about the manufacturer’s financial results. “The positive results achieved by Emirates Steel in 2017 clearly indicate success of the company’s resilient business model, despite the challenges faced by the metals and steel industry globally,” he commented.
“The increasing demand for Emirates Steel’s products in the international markets is testament to the company’s quality and production standards. We will continue to increase volumes, drive efficiencies and further develop our product range to reach our annual production capacity of 3.5mn tons, raise safety standards and explore new markets to further expand our global footprint,” he added.
In response to a media question, the CEO indicated that he was not perturbed by the proposed increases on tariffs by US President Donald J. Trump on steel and aluminium imports. The US market accounts for about 5% of Emirates Steel exports.
Sophisticated production facilities
LogisticsGulf as part of the visiting media delegation was given a first-hand tour of the sprawling and modern production facilities of Emirates Steel, the only integrated steel plant in the UAE, utilizing the latest rolling mill technology to produce rebar, wire rod and heavy sections. On show was the recently developed scrap shredding facility that supports increased efficiencies in the operation of the electric arc furnaces. This new facility will play a major role in re-cycling scrap metal available in the Emirates, as well as reducing operating costs and increasing flexibility for the primary feedstock used by the company.
Additionally, the company has successfully designed and developed a twin-casting system, the first of its kind in the UAE, which will enable the company to further increase production volumes. This new technology was commissioned in July 2017 and it has already increased the production capacity by 20%.
“Emirates Steel continues to focus on manufacturing high quality steel products to meet the needs of a growing construction market and the huge infrastructure projects ongoing in the UAE and the GCC. Our heavy structural steel sections are used in the construction of bridges, roads, giant residential towers, airports, ports and in the construction industry for industrial and engineering applications,” affirmed Engr. Al Remeithi.
“Emirates Steel will rely heavily on the heavy sections mill when implementing our expansion strategy, further targeting new markets,” the CEO asserted in prepared remarks. The plant was commissioned in 2013 with production reaching 540,000 tons per annum in 2017. The company increased production of rebar to 2.2mn tons per annum in 2017, compared to 2.1mn tons per annum in 2016.
The company is currently diversifying its product strategy with the development of value added products such as specialist steel wire rods as used in a diverse range of applications from the automotive sector to the manufacture of furniture.
Sheikh Khalifa Excellence Award
In February 2017, Emirates Steel won the prestigious Sheikh Khalifa Diamond Excellence Award, which was presented by Sheikh Hamed Bin Zayed Al Nahayan, President of the Abu Dhabi Crown Prince’s Court. It is the first company in the industrial sector to win this award.
The company has implemented various cost control measures and has reduced the manufacturing costs per ton of steel by 37% from 2012 to 2017. Similarly the overhead cost per ton of steel has been reduced by 25% during this period. An independent benchmarking exercise conducted by Wood Mackenzie, a global research and consultancy group, positions Emirates Steel as a top quartile player in terms of the world’s most efficient producers.
21% of the Emirates Steel workforce is Emirati with 75% of UAE nationals constituting the executive management. Currently, Emirates Steel employs 2,230 personnel across all its divisions and facilities.
Established in 1998, Emirates Steel has grown in a relatively short period from a simple re-roller of imported steel billets to a complex integrated manufacturing plant using modern production techniques.
