Danube Building Materials said it will invest Dh40 million ($10.8 million) in the fast growing steel market in Bahrain as part of its plans to target the thriving construction market in the Kingdom.

The investment comes at a time when studies reveal that GCC steel trade is expected to cross $200 billion in 2010 owing to the ongoing construction boom and numerous project launches taking place in the region.

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, said a top official.

It is focused in taking significant strides to meet the needs of construction sector, as industry experts forecast the growth in steel production in Middle East to reach 35 million and the consumption of over 41 million tons of finished goods by 2010, said Danube Building Materials chairman Rizwan Sajan.

"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," he added.

Danube is also planning to establish a Steel service centre (Cut and Bend facility) which will facilitate to address large projects’ requirements in Bahrain.

The 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.

“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,” he noted.

The recent ‘Middle East Steel 2008 Report’ from Meed stated that projects worth $2 trillion are planned or under way in the Gulf, with less than one quarter already awarded.

The steel market in Bahrain has opened up recently which predominantly was being catered by Saudi based mills and Qasco-Qatar.

The company also revealed that it will have large-scale steel imports 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," he noted.

He said the company was currently eyeing over Dh120 million in annual revenues from its 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,” Sajan added. 

In addition to its Bahrain-based expansion, Danube had recently announced plans to invest Dh50 million in a new steel facility in Oman and Dh200 million in the steel industry in UAE for 2008.-TradeArabia News Service