An Increasing Share

How will the launch of your new rebar mill play a key role in your efforts to capitalize on the infrastructure-hungry markets in the region?

When we took over the plant in 2010, it was set up to produce HBI/HDRI used to produce steel. After three years of selling HBI, we commissioned our Steel Melt Shop in April 2014, which has a capacity of 2 million tons per annum to produce billets and rounds. We started selling special grade and commercial grade billets. In April 2016, we started our prestigious rebar mill, with a 1.4 million ton per annum capacity, which is one of the largest and most modern, state-of-the-art mills in the world. We can produce 1.4 million tons per annum of rebar of 8mm to 40mm here. The concept of our integrated steel plant is that we should be able to convert iron ore into a finished product. In the last five months, we made around 100,000 tons of rebar. The ramp up with the new rebar mill is progressing according to plan. There are market issues at the moment since the oil prices went down and the speed of construction developments have been reduced. We now have a competitive advantage in the region for product like Rebar for the construction industry. The first thing that we are working on is how to increase our market share.

What was the reason behind the company changing its operating role from being a supplier of HBI offering to semi-finished and finished steel products?

When we took over the direct-reduced iron (DRI) plant, the concept was always there that we were not going to be just a HBI supplier; we wanted to go for downstream facilities. It is our goal to maximize our value addition in the country. The utilization of HBI in the country and within the GCC is limited, whereas the rebar can be utilized 100% in Oman, the UAE, and other nearby places.

How do the facilities in the integrated steel plant maximize efficiencies in order to generate a greater in-country value?

Our plant layout is compact; we have hot charging technology, with the hot DRI directly going into the electric arc furnace at a temperature of about 650-700 degrees celsius. We therefore save a substantial amount of energy in doing so. Our steel melt shop and mill are also integrated so that hot billets can be directly put into the furnace in the rolling mill. The whole point is that we consider ourselves to be more energy efficient than anybody else, certainly in the GCC. As far as hot material going directly into the furnace goes, we are the first company in the world with such a facility. I do not have to keep large intermediate stocks because we are directly feeding hot material and can therefore manage with much less inventory.

What are some of your targets and expectations for the company over the next 12 months?

Our immediate concern is that we need to increase our rebar mill production to full capacity. The other concern we have is that the availability of gas at a subsidized price to produce as much metallics as I need. Therefore, we need to find other sources of metallic to increase the production of our steel melt shop to 100% capacity. We are also looking for further investment in the longer term to improve our capacities and reduce costs. We are looking at possible options and will be taking a decision in the next six months as to how we can really put in some additional facilities so the cost can be reduced. The target is to accomplish this in three years. We are also a company that is socially-minded. We are close to society and do a lot of work for society under our CSR initiatives, including the building of facilities for the weaker sections of society and children.