Bahrain-based Gulf United Steel Holding Company (Foulath), a global steel investment vehicle, said its subsidiary United Steel Company (SULB) has successfully completed the acquisition of a steel company in Saudi.

SULB, a steel manufacturing JV between Foulath (51 per cent) and Japan’s Yamato Kogyo (49 per cent), a leading player in the production of beams and structural steel sections, dubbed the acquisition of United Gulf Steel Mill Company (UGS) as a major move since the company boasts of an annual capacity of 450,000 tonnes of light and medium sections and beams.

Foulath, the first fully integrated steel producer, said its shareholders are among the region’s most reputable and committed investors, each with a long track record of investment in the regional steel and metals industry and other key economic sectors.

Gulf Investment Corporation (GIC), Kuwait, which is owned equally by the six governments of the GCC has 50 per cent of the stake in Foulath, followed by Qatar Steel Company (with 25 per cent), Mohammed Abdulmohsin Al-Kharafi & Sons Company, Kuwait and National Industries Holding Group, Kuwait with with 10 per cent and Kuwait Foundry Company with 5 per cent.

GIC is a leading financial institution offering a comprehensive range of financial services.

The group was established in 1983 to reflect the desire of the GCC countries to establish an investment entity to promote the role of private sector in economic activity and support economic development in the GCC region.

GIC has focused its activities in direct investment in new projects in the GCC countries, providing investment banking services to both, private sector and governments, as well as to invest in GCC and global markets.

GIC is the largest non-Bahraini investor in the Kingdom with the market value of investments of about $6 billion in the key sectors of iron & steel and energy.

Commenting on the UGS acquisition, Hisham Al-Razzuqi, GIC chief executive officer said: “The acquisition of UGS with an annual capacity of 450,000 tonnes of light and medium sections and beams by SULB emphasizes GIC’s main mandate in developing the economy of the region through investments in profitable projects or acquiring companies that are facing difficulties and turn them around to profitable companies.'

GIC, he said, had invested in about 50 projects in the vital sectors, specially steel, chemicals, petrochemicals and utilities in partnership with others both, private and government sectors.

'For example in 2000, GIC acquired Bahrain-based Gulf Industrial Investment Company (GIIC), pelletizing plants with an annual capacity of 12 million tons of pellets, which was underperforming, and with the knowledge and experience of GIC in industrial investments, succeeded in turning the company into one of the most profitable companies in the region,' he stated.

'Similarly, SULB has acquired UGS, which was facing financial difficulties, to turn it around to profitability by integrating it with Foulath’s fully integrated facility in Bahrain,' Al Razzuqi added.

According to him, UGS being part of Foulath will benefit from the integration by securing raw material (billets) from SULB on a continuous basis at a very competitive price, enabling it to penetrate the market, ensuring its sustained profitability.

Al-Razzuqi pointed out that SULB and UGS are currently the only producers of a full range of light, medium and heavy, sections and beams in the region with a combined capacity of about 1.1 million tons a year which will replace about 25 per cent of the total annual imports of 4 million tons.

“GIC will continue to support private and government sectors to advance its mission and play a major role in supporting the growth and further development of the GCC economies,” he added.-TradeArabia News Service