Dubai Investments Industries (DII), a wholly-owned subsidiary of Dubai Investments, has acquired a 10 per cent stake in Saudi Arabia-based South Steel Company, which is set to become one of the largest steel plants in the Gulf region.

Promoted by Pan Kingdom Investments, the $350 million South Steel Company is scheduled to commence commercial operations from December 2010, with an initial capacity of one million tons per annum.

The plant, being set up with technological assistance from Germany-based SMS Group, will produce top-quality steel billets and reinforcement bars in accordance with international standards.

Commenting on the acquisition, Shukri Al Mehairi, DII general manager, said, "We are delighted to have acquired a stake in South Steel, which is poised to become a leading player in the regional steel market."

"DII has been actively looking to expand its regional footprint and broaden the scope of its investment activities. This acquisition provides us with an opportunity to promote our strategic interests and gain significant traction within the rapidly growing Saudi market," he observed.

“Steel is among the fastest growing industries today, and with construction activities proceeding apace across the Middle East and with the regional steel industry tipped to sustain its growth momentum through the next decade, demand for steel is expected to rise even further,” Al Mehairi added.

“As a high-capacity plant incorporating state-of-the-art technology features, South Steel Company will be uniquely positioned to cater to this huge demand, particularly in Saudi Arabia and Gulf region, where the frenetic pace of construction has dramatically shot up demand for quality steel,” he noted.

While the steel billets produced at South Steel Company will entirely be consumed within Saudi Arabia and Gulf region, 15 per cent of the total output of reinforcement bars will be exported to Yemen and Sudan, with the rest consumed domestically.

The plant is expected to achieve 100 per cent capacity utilization within the fifth year of operation.

Dubai Investments Industries is the industry arm of Dubai Investments. The company is committed to boosting the industrial development in local and regional markets, and targets both new and established industries.

Its portfolio of subsidiaries includes Globalpharma, Emirates Building Systems, Marmum Dairy Farm, Edible Oil Company, Emirates Extruded Polystyrene, United Sales Partners, Dubai Cranes & Technical Services, Gaussin Middle East and Techsource.-TradeArabia News Service