Industries Qatar (IQ), a Qatari conglomerate with subsidiaries and investments in the petrochemicals, fertilizers and steel industries, has announced that its subsidiary Qatar Steel has signed an off-take agreement with Qatari state-owned company Muntajat to migrate the marketing, sales and distribution activities of Qatar Steel’s entire production to Muntajat.
According to IQ’s statement, the migration arrangements have commenced and are scheduled to be completed by the beginning of the second half of the current year. At that stage, Muntajat will formally take over the marketing, selling and distribution activities of Qatar Steel’s entire production.
This new arrangement capitalizes on the strengths of both companies. Qatar Steel will continue to focus on steel production and to enhance its operational and financial performance through efficiency improvement, cost reduction and other operational synergies. Muntajat will apply its knowledge and accumulated know-how in global marketing to reach a wider customer base for Qatar Steel’s products internationally, which will in turn augment Qatar Steel’s ability to achieve higher netbacks in newly penetrated markets.
The company also stated that having the aforementioned agreement in place will further improve Qatar Steel’s performance by decreasing transportation and shipping costs as well as providing more innovative and efficient logistic capabilities.
This agreement will make Muntajat the sole marketer and distributor of IQ’s finished products, which will increase the ability to achieve synergies at a group level through being more efficient in both import and export shipping activities, thus providing for further cost reduction.