New steelmaking plant

Hussain Al Nouwais, chairman of ESI, said ESI was steadily delivering on its vision to become a steel company with a production capacity of five million tonnes per annum. "ESI is pioneering the way for the steel industry in the UAE and will achieve this vision through a series of expansion projects. "This new steelmaking plant, with an estimated investment of Dh802 million, is a significant component of our overall backward integration plan and gives us a competitive advantage over many major steel players in the region," he said. "Once commercial production begins in May, the production of steel billets will displace much of ESI's imported billets and also lower production costs by a significant amount," he said. Ahmad Al Daheri, vice-president of projects at ESI, explained that the production capacity of the steelmaking plant would be 1.4mn tonnes per annum.

Last year, ESI signed a multi-million dollar deal with Italy's Danieli & Company to execute a second vertically-integrated phase of its expansion, which will increase the operation's steel production capacity to three million tonnes per annum by 2011. The final link in the production chain will be commissioned later this year, with a plant that converts imported iron ore pellets into raw iron for the new steelmaking plant. The import facilities for the pellets only became operational in February of this year.