Abu Dhabi's Emirates Steel has completed the second phase of its expansion plan and intends to further boost production to around 6.5 million tonnes per year within the next four years, the company said in a statement on Monday.

Emirates Steel, a subsidiary of government-owned Abu Dhabi Basic Industries Corporation (Adbic), launched a two-phased expansion programme worth $2.45 billion in January 2006. 

The first phase, worth $816 million, was completed in June 2009 and has increased the rolling output capacity from 750,000 tonnes to 2.1 million tonnes.     

The second phase of the expansion plan has raised its steelmaking capacity to 2.8 million tonnes per annum and its capacity to produce direct reduced iron (DRI) to 3.2 million tonnes, making it one of the biggest DRI producers in the Middle East, Emirates Steel said.

'The plant's new facilities together with its planned further expansions will see Emirates Steel increase its production to around 6.5 million tonnes per annum within the next four years,' the statement said.     
The expansion plan and overall growth strategy of Emirates Steel are in line with the government's long-term plans for the development and diversification of the Emirate's economy, the company's chairman, Suhail Al Ameri, said in the statement.

With the latest expansion phase complete, Emirates Steel has started the hot commissioning of its heavy section mill at a cost of around $650 milion. The steelmaker can now produce large-size sections, beams, columns and sheet piles.

Outlook for steel demand was still robust, despite the global economic crisis leading to the cancellation of a number of projects. The company said: 'Construction projects, mainly in Abu Dhabi, are currently the key driving force behind the steel industry growth.'     

Demand for medium and heavy sections in the Middle East are  set to reach 4.3 million tonnes in 2012, the statement cited forecasts from Steel Business Briefing, with Saudi Arabia and the United Arab Emirates being the biggest consumers. - Reuters