United Steel Company (SULB), a joint venture between Bahrain-based Gulf United Steel Holding Company, one of the Middle East's leading steel investment vehicle and holding companies, and Japan's Yamato Kogyo Co., Ltd, a leading global beams and structural sections producer, has announced that it has concluded Engineering Procurement and Construction (EPC) contracts for the development of its $1.2 billion steel manufacturing project in Bahrain, which will be the Middle East region's first fully integrated beams and structural sections producer.
The contracts were awarded to two consortiums. The first is comprised of Kobe Steel of Japan and US-based Midrex. The second consists of SMS Meer and SMS Concast of Germany and Samsung Engineering of South Korea.
With the awarding of the contracts, the consortiums will implement SULB's planned facilities, which include a direct reduced iron (DRI) plant with an initial capacity of 1.5 million metric tons per year, and a melt shop and heavy section rolling mill with a designed capacity of 800,000 metric tons. Kobe Steel and Midrex will undertake the construction of the DRI plant, while SMS Meer, SMS Concast and Samsung will jointly develop the melt shop and heavy section rolling facilities.
Commenting on the project, SULB's chairman and managing director Khalid Al-Qadeeri said, "Being a fully integrated steel production facility will allow SULB to be the lowest cost producer of its kind in the world and ensure sustained competitive advantage. Once fully operational, SULB is expected to replace approximately 14 percent of the current imports of medium and heavy beams and structural sections into the Middle East markets. SULB will also employ approximately 1,000 people, of which we expect about 70 percent will be Bahraini nationals."
Work by the parties will commence immediately. It is expected that construction will begin in the second half of 2010 and that SULB will begin commercial operations and the production of medium and heavy beams and structural sections by the second half of 2012. SULB's facilities are being established within Bahrain-based steel company Foulath's existing 1.3 million square meter state-of-the-art steel production complex located in Bahrain's Hidd Industrial Area.
SULB will be situated adjacent to Gulf Industrial Investment Company's (GIIC) pelletizing plants and United Stainless Steel Company's (USCO) cold rolled stainless steel mill, both wholly owned subsidiaries of Foulath.