SABIC to build iron and steel plant in Jubail

Saudi Basic Industries Corp (SABIC) will build a new iron and steel plant in Jubail Industrial City, Saudi Arabia by 2012.

The plant will have with a capacity of 1Mt/y to meet the increasing demand in the local market, said Muhammad Al-Mady, SABIC CEO.

He said iron and steel prices would depend on the supply and demand. "Efforts are also under way to lift the customs tariff on steel but so far, no decision has been taken in this respect," he said.

SABIC, which increased iron and steel production by 7%, captured 62% of the local market in the first quarter of this year.

Speaking about rising steel prices, Al-Mady said: "We believe that the problem is not with prices but with declining production in some factories. We hope that a rise in prices will encourage some local factories to resume production," he said.

SABIC made a net profit of SR5.43bn ($1.44bn) in the first quarter of this year against the losses worth SR258M it suffered during the same period last year. The company's first quarter profit last year amounted to SR4.58bn ($1.22bn).

Al-Mady said the future of iron and steel products depended largely on the global economic recovery. "The rise in prices means the international economy is improving in a reasonable way."

Source: Arab News, Riyadh; 20 Apr 2010