The GCC steel trade is expected to cross USD 200 billion in 2010 according to latest studies, with the demand on steel witnessing a huge increase due to the ongoing construction boom and numerous project launches taking place in the region. In line with this, Danube Building Materials FZCO, the leading player in the construction, interior decoration and shop fitting industry, has announced its plans to invest AED 40 million in the fast growing steel market in Bahrain. Company officials revealed that the investment is part of Danube’s plans to target the thriving construction market in Bahrain, which was marked by an earlier expansion to the Kingdom in 2007, as a means to further strengthen its presence in the region.
The recent ‘Middle East Steel 2008 Report’ from MEED stated that projects worth USD 2 trillion are planned or under way in the Gulf, with less than one quarter already awarded. This will fuel the growth of the regional steel trade, which is anticipated to make over USD 50 billion from projects currently under way and an additional USD 150 billion from new schemes in the pipeline. Amidst the Middle East steel industry’s rapid expansion, Danube is focused in taking significant strides to meet the needs of the fast expanding construction sector, as industry experts forecast the growth in steel production in the Middle East to reach 35 million and the consumption of over 41 million tons of finished goods by 2010.
“The rapid movement of raw steel and steel-derived products in the region has been largely influenced by the construction of massive real estate projects within its largest and fast-growing states,” said Rizwan Sajan, Chairman, Danube Building Materials. “Bahrain continues to be one of the key markets for steel, given its burgeoning steel imports to feed its huge consumption, and we believe that the presence of a dedicated steel facility in the country will give us a definite advantage in supplying this market with our high quality products. Through this investment, we are expecting to facilitate a steady supply of the most in-demand steel products to be used in the construction of current and projects in the Kingdom, as well as in its neighbouring countries.”
The steel market in Bahrain has opened up recently which predominantly was being catered by Saudi based mills and QASCO-QATAR. With Turkey and other CARES approved origins now being accepted, has opened up more avenues for the contractors to get more suppliers. Danube has strategically invested in infrastructure with a long term perspective in Bahrain and is aiming to leverage its volume pricing in UAE to the Bahraini market. Through this, contractors will now be able to enjoy a keener competitive price from Danube apart from high quality products and impeccable on time deliveries. Danube is also planning to establish a Steel service centre (Cut and Bend facility) which will facilitate to address large projects’ requirements in Bahrain. Danube’s state-of-the-art facility, built on a 250,000 sq. ft. plot in the industrial area of Salmabad, will host the company’s industry-leading steel products. Furthermore, Danube has also revealed that it will have large-scale imports of steel products from Turkey, China, Taiwan, Korea, South Africa, Ukraine, Russia, India, Saudi Arabia and Iran, which will then be processed to address varying customer requirements.
“As we intend for our Bahrain steel manufacturing facility to be the premier source of steel and steel products in the Kingdom, we are also investing considerably in product development and marketing plans, which will make our products more efficient as well as reachable to both regional and global clients. Having embarked on this ambitious expansion strategy, we are currently eyeing over AED 120 million in annual revenues from our steel operations in the Kingdom. We are also looking at potential regional destinations where we can position our facilities in line with our aims to keep up the growth momentum for the Danube brand,” concluded Sajan.
In addition to its Bahrain-based expansion, Danube has recently announced its plans to invest AED 50 million in a new steel facility in Oman and AED 200 million in the steel industry in UAE for 2008. Maintaining a high level of quality across all its products, the company is currently in the process of initial market testing to ensure the smooth delivery of its products to customers.
