Qatar Steel has signed a contract with Siemens VAI to build a new steel plant to meet growing demand in Qatar and the wider region, the company said in a statement on Wednesday.

The plant, which will have the capacity to produce 1.1 million tonnes of steel per year, will start production in the first quarter of 2013, a company spokesman said, declining to give the total value of the project.

It will be located in Qatar's industrial city of Mesaieed adjacent to the company's existing plant, which produces about 2 million tonnes of steel per year, he said.

Qatar Steel, a unit of Industries Qatar, last year bought a 20 percent stake in Saudi Arabia-based South Steel Company to meet growing local demand and to supply Yemen and neighbouring African markets.

Qatar, the world's largest exporter of liquefied natural gas, has been investing in industries other than gas. It launched a $5.7 billion aluminium plant in December 2009 which was inaugurated last year.   -Reuters