Arcelor Mittal announces partnership for a seamless tube mill in Saudi Arabia
Arcelor Mittal has signed a joint venture agreement with the Bin Jarallah Group of companies for the design and construction of a seamless tube mill in Saudi Arabia.
This state of the art facility will be located in Jubail Industrial City, north of Al Jubail on the Persian Gulf. The mill will have a capacity of 500,000 tons per year. About two thirds of its capacity will be used for tubes used in the oil industry ("oil country tubular goods"), and the remainder for line pipe, in sizes ranging from 4" to 14".
Semi-products for the mill will be sourced from Arcelor Mittal steel plants. Construction is planned to commence at the end of the first quarter of 2008 and to be completed by the last quarter of 2009. Once it is up and running, the mill is expected to employ 420 people.
The agreement with the Bin Jarallah Group was signed on February 14, 2007. Arcelor Mittal will hold a 51% share in the company established for this project, with the Bin Jarallah Group holding the remaining 49%.
Arcelor Mittal will have management and operation rights. The mill will partially be funded by the Saudi Investment Development Fund. Arcelor Mittal will apply for an investment license under the Foreign Investment Regulations of The Kingdom of Saudi Arabia.
Sudhir Maheshwari, Executive VP, Finance and M&A and member of Arcelor Mittal's Group Executive Committee, commented: "This project gives us a strategic opportunity to enter the Middle East's, and in particular Saudi Arabia's, thriving markets. Its location provides access to international sea lanes through the Persian Gulf as well as proximity to energy sources. The Al Jubail project will allow us to strengthen our relationship with Saudi Aramco, who will be one of the key customers of the mill. It will position Arcelor Mittal's pipes and tubes business, which already has facilities in Eastern Europe, North America, Africa and Kazakhstan, to best supply the world's largest markets".
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