News dalla rete ITA

28 Luglio 2021

Emirati Arabi Uniti

UAE STEEL INDUSTRY PREPARES FOR Q4 SLOWDOWN AMID DUBAI EXPO

Faced with soft demand and an oversupplied market, the UAE steel industry is hard pressed to reach its pre-pandemic numbers this year, the CEO of Conares, the country’s second largest steel manufacturer, told Zawya. Bharat Bhatia said domestic demand is expected to be 15 percent higher in 2021 compared to last year, but pre-COVID numbers will remain a distant goal for the steel producers. “Construction activities will be slower than usual in the last quarter, when the Expo gets underway, because we don’t want to showcase a city under construction.”  “On the projects front, Etihad Railway is on track, and new developments have been announced by Emaar, but these are not of the scale of a Burj Khalifa or a JBR [Jumeirah Beach Residence]. After six months, we may see a surge in those types of announcements.”  EXPORTS The UAE’s steel exports has benefitted from a strong recovery in global steel demand since the last quarter of 2020. Steel prices worldwide have reached new highs due to rising demand stoked by COVID-19 stimulus packages in the US and European markets as well as by production curbs in China. The UAE’s steel exports to the US for the first five months of 2021 grew by 9 percent to 110,862.3 metric tonnes compared to 101,558.5 metric tonnes for the same period last year, according the US Department of Commerce data.    He noted, however, that fourth quarter exports would depend on cash flow and how well the US and Europe control the pandemic. “I am not very positive for the last quarter as we are seeing issues related to COVID, cashflow and logistics. Moreover, in the last quarter, banks [in these markets] are hesitant to provide funds till they see the balance sheet of 2021. If the year is closed well, we will see liquidity coming in the first quarter of 2022.” KEEPING LIGHTS ON Conares’ diversified product mix has helped the family-owned company keep its production lines humming despite a slow construction market. “We are the only steel producer in UAE to have diversified across rebar, pipes and colour-coated coils. Those [non-rebar products] are now giving us business in the UAE market,” said company director Vivek Bhatia. The company is also targeting niche projects where it can leverage its value-add facilities, such as galvanising for pipes and tubes. Kush Bhatia, Director – Sales & Marketing at Conares, said, “We supplied galvanised hollow-section steel for the entire 400-km UAE–Oman border fence. We are also supplying fire pipes to NAFFCO.” When travel curbs and lockdowns made visa processing and hiring of skilled staff difficult, the company invested in Level 2 automation to ensure that its JAFZA-based colour-coated steel facility started operations on schedule in December 2020. “Last year, with many countries in lockdown, we used the time to our advantage to innovate our processes, cut down the turn-around time, and work on supply chains. That itself was a growth path for us,” said Kush.  HEDGING RISKS COVID-19 also provided additional impetus to the company’s plans to diversify, to better hedge its risks. Bharat Bhatia said: “Prior to 2019, we were doing 65–70 percent [of our sales] in the UAE, and out of the remaining 30 percent, 15–18 percent was in the GCC, and the balance was exports. We are now targeting 40 percent in the UAE for all our products, 25 percent in the GCC and 35 percent outside the GCC.” He added that the company is setting up an export-focussed 100,000-metric-tonne steel plant in mainland UAE with 100 percent ownership approval from Dubai FDI. “Our mainland facility will start with pipes and tubes and is dedicated to the GCC and the Arab League countries, while our JAFZA plant will continue to cater to the UAE. We will be getting our first product from this facility in early August.” The new mainland facility will increase Conares’ total production capacity to 1.1 million tonnes. “We have plans to add another 300,000 tonnes of product, which will be a fourth [business] vertical,” the CEO added. Meanwhile, overall exports have increased by 25 percent with a focus on diversifying export geographies. Last year, the company partnered with Etihad Credit Export Insurance (ECI), the UAE’s export agency, to grow its exports by leveraging ECI’s global customer database.    (ICE DUBAI)


Fonte notizia: Zawya