Bahrain-based United Steel Company (SULB) is set to develop a $1.2 billion steel manufacturing plant, which once operational, will be the region’s first fully integrated beams and structural sections producer.

United Steel is a joint venture between Gulf United Steel Holding Company (Foulath), a leading steel investment vehicle based in Bahrain and Japan’s Yamato Kogyo Company, a leading global beams and structural sections producer.

The company on Tuesday awarded engineering procurement and construction contracts for the massive plant to two consortiums - one comprising  Kobe Steel of Japan and Midrex of the US and the other having SMS Meer and SMS Concast of Germany and Samsung Engineering on board. The construction will begin in the second half of 2010.

Commenting on the award of the contracts, Khalid Al-Qadeeri, chairman and managing director of SULB, said: 'This is the final milestone to implementing the SULB project and we are pleased to have these world leading industrial engineering and construction companies on board.'

'As per the contract, the consortiums will implement SULB’s planned facilities, which include a direct reduction iron plant (DRI plant) with a nameplate capacity of 1.5 million tons per year (mtpy), which is capable of producing 1.8 mtpy, and a melt shop and Heavy Section Rolling Mill (HSM) with nameplate capacity of 0.8 mtpy, which is capable of producing 1.0 mtpy.'

Kobe Steel/Midrex will undertake the construction of the DRI plant while SMS Meer, SMS Concast and Samsung will jointly develop the MS and HSM facilities.

According to SULB chief, the plant will begin commercial operations and the production of medium and heavy beams and structural sections by the second half of 2012.

Al-Qadeeri said, 'We are committed to working with world-class partners on this path breaking project, which will see the further development of the Middle East’s steel industry. With the addition of SULB to Foulath’s existing complex we are also creating the world’s first fully integrated steel production facility with manufacturing capability extending from pelletizing to final product.'

'This will in turn allow the company to be the lowest cost producer of its kind in the world and ensure sustained competitive advantage,' he noted.

According to Al-Qadeeri, SULB will replace14 per cent of the current imports of medium and heavy beams and structural sections into the Middle East markets once it becomes fully operational.

The project is poised to give a big boost to the Kingdom's economy as SULB will employ 1000 people, 'of which we expect about 70 per cent will be Bahraini nationals,” he added.

Al-Qadeeri thanked the Kingdom of Bahrain headed by His Majesty, the King, Hamad bin Isa Al Khalifa, HRH Prince Khalifa bin Salman Al Khalifa, the Prime Minister, and HRH Prince Salman bin Hamad Al Khalifa, the Crown Prince, for the support they have extended to SULB.

Al-Qadeeri also lauded 'the professionalism shown by Bahrain’s government officials and, in particular, the Ministry of Industry & Commerce headed by Minister Dr Hassan Fakhro.'

Dr Joachim Schönbeck, president of SMS Meer, said: 'With Foulath’s existing pelletizing plants at its Hidd complex, this will be one of the most efficient production sites in the Middle East region.'

Jacques F. Zuber, president & CEO of SMS Concast, said, 'As the pioneer and leading supplier of continuous casting technology, SMS Concast will provide its latest melting and casting technology for the project.'

Shohei Manabe, executive officer of Kobe Steel, said the contract was company's second with Foulath group. 'Kobe Steels was previously awarded the contract for the construction of Foulath subsidiary Gulf Industrial Investment Company’s No.2 pelletizing plant in 2007 and we are proud that our technology will further contribute to the Foulath group’s projects.”

James D. McClaskey, president & CEO of Midrex Technologies, said “This is a very momentous occasion. Not only is this the first Midrex Direct Reduction plant for Bahrain, but it also marks a considerably strategic steelmaking project for the Middle East region.”

McClaskey said, “We are honoured that Midrex has been chosen as the preferred direct reduction technology provider and we are proud to be working with our parent Kobe Steel and our partners at SMS and Samsung.

Ki-Seok Park, president and CEO of Samsung Engineering said: 'Together with technology licensor, SMS, we will prove our commitment to our client by delivering a superior quality project, while forging long-term relationships with our partners.'

SULB’s facilities are being established within Foulath’s existing 1.3 million sq m steel production complex located in Hidd Industrial Area in Bahrain.

It will be situated adjacent to Gulf Industrial Investment Company’s (GIIC) pelletizing plants and United Stainless Steel Company’s cold rolled stainless steel mill, both wholly owned subsidiaries of Foulath.-TradeArabia News Service