Despite fluctuations in the construction market, the demand for steel products in the UAE is quite stable and has been on a growing trend. Over the past few years, the UAE’s steel industry has witnessed an upswing in the range of 5 to 15 per cent growth annually.
Mr. Bharat Bhatia, CEO of Conares, the second largest private steel manufacturer in the region, says that the number of upcoming projects has increased. For 2016, our market intelligence forecasts a growth in the number of tenders, supporting the World Expo 2020 to be hosted in Dubai. Traders in the UAE are keen to buy from local manufacturers in order to save inventory cost and avoid risk of price fluctuations.
He was speaking on the sidelines of the Big 5 International Business and Construction Show 2015, which kicked off in Dubai on Monday. Conares is exhibiting at Stand No. A161, Sheikh Saeed Hall -1, Dubai World Trade Centre.
“With the existing developments for the Expo 2020 and the plans envisioned under the Vision 2021, projects will be on track to be completed before the year 2020. This anticipates a growth in the industry by 30 per cent until the end of this decade, which will help local steel manufacturers cater the odd three to four million metric tonnes rebar demands for all these projects,” said Mr. Bhatia.
“There are positive expectations on steel demand, which will grow substantially from 2016 onwards. This will have an additional growth of 10 per cent on a yearly basis from 2017. From the steel industry standpoint, local manufacturers will be in a strong position to cater to each of the upcoming projects. Aside from this, we expect a lot of job opportunities from the second quarter of 2016,” he added.
Conares manufactures 500,000 metric tonnes of steel rebars, and 250,000 metric tonnes of steel pipes annually; and is on the track to produce additional 250,000 metric tonnes as per the expansions being completed at its plant. About 85 per cent of its rebar production goes to the domestic market and about 15 per cent goes to the GCC region. For the pipe products, 65 per cent of the output goes into the GCC region and the rest is exported globally.
Mr. Bhatia further said, “In line with our expansion plan, we are on track with the new Pipe Mill for 12 inch pipes. The foundations for the plant are complete. We expect trials by the end of this year, keeping us geared to deliver towards the end of Quarter 1 in 2016. In line to become a one million ton steel manufacturer, we hope to achieve maximum utilization of our production capacities.”
“Keeping the vision of UAE and Dubai 2021, we expect multiplying our revenues to exceed AED two billion mark by the year 2017. In terms of facility growth, we are aligning Conares with the region’s commitment to infrastructure developments. When it comes to investments, Conares is on track to invest in an additional AED 200 million in the next five years, from its existing capital investment of AED 900 million approximately. Once the process of plant expansion is completed, we intend to diversify our product portfolio, which is backed by future expansions. The Vision 2021 for Conares is crucial to make it a manufacturing powerhouse,” he added.
According to him, the expansion is aimed at serving the domestic market as well as exploring export opportunities. This would help us meet the demand for infrastructure developmental activities ongoing in Dubai to prepare for hosting Expo 2020. The rapidly growing demand for the construction material including iron and steel opens huge opportunities for Conares not only in the UAE but the entire region.
“Strategically, we have aimed to have a wider market presence based on the product which is why we have a certain percentage of exports outside the region. Pipes, being a global product for us, stand at 40 per cent in terms of our export. Rebars, being a regional product, 75 per cent of our production is allotted to the local market and the remaining is spread within GCC. We intend to maintain same strategy for the coming year.”
The state-of-the-art steel plants of Conares, spread in an area of over 1.5 million sq.ft. in UAE, currently manufactures steel pipes and rebars. The rebars represent about 20 per cent the UAE market share and the pipes cater to 25 per cent of the total market demand in the region. Operational in these two major segments of the steel industry, Conares has grown to be a key manufacturer and the region’s leading provider of downstream steel products. Its global and regional presence gives it a competitive advantage in sourcing raw materials.
Conares has constantly been evolving with the region. Our growth has remained on a buoyant trajectory over the last 25 years of our operations, helping us cross significant growth milestones in the steel industry. Today Conares is the region’s second-largest manufacturer of steel pipes and rebars, the only private manufacturer in the UAE and is among the three major steel rebar mills continuously operating in the country.