Saeed Al Remeithi, CEO of Emirates Steel, explains how the manufacturer plans to be a torchbearer for sustainability in the regional industry
This September, the global steel community met in Paris to discuss the crisis facing the international steel industry. With Chinese mills leading the way in terms of over-production, European and other regional producers are feeling the pinch.
Manufacturers in the UAE are not exempt from the pain, with the market being flooded by cheap steel from China and Turkey. As a result of this imbalance, the UAE’s Council of Ministers has encouraged the local construction industry to use products made in the country, through pricing rules for government procurement projects that favour local products.
Furthermore, the Ministry of Economy has established the Industrial Coordination Council and imposed a custom duty on imports of steel products. While these efforts have helped the local steel industry to offer their products at the best quality and at competitive prices, the imbalance continues to have an impact on the economy of the region.
In order to better understand the challenges facing the steel industry in these difficult times, Big Project ME speaks to Saeed Ghumran Al Remeithi, CEO of Emirates Steel, who explains how his company – part of the UAE’s largest industrial conglomerate, SENAAT – is meeting these difficult market conditions head-on.
“The current market conditions are very challenging; its impact is affecting the local and global steel sector due to the global overcapacity levels and flow of low-quality, cheap steel imports into the markets, and specifically into the MENA region,” he says.
“At Emirates Steel, we’ve been working towards surpassing these challenging conditions by moving away from spot business transactions to a more mature business model, with responsible partnerships. The gradual growth in demand for sustainable steel products is almost guaranteed, especially with all the current and planned projects in the country.”
With the UAE having 4.65 million tons of rebar capacity installed, along with 1.25 million tons of section capacity and 0.84 million tons of wire rod capacity, there certainly is enough domestic supply to meet the expected demand, Remeithi adds.
Looking at Emirates Steel’s performance in the first half of the year, the CEO reveals that the manufacturer – which currently has a 52% share of the domestic market – reported sales of 1.820 million tons of finished steel products. This compares to 1.560 million tons for the same period in H1 2015.
“Emirates Steel has sustained its position in the UAE domestic market through its approach in developing long-term supply contracts to meet market needs on time; with a focus on customer service,” he explains.
“We have developed a brand strategy that revolves around clearly articulating our differentiation against competitors, and we continuously push these differentiators to our customers by aligning our brand to our unique value proposition – which focuses on quality, innovation and price.
“[I’d say] that we’ve become an expert in providing the highest standards of steel application and we never fail to optimise our efforts in offering the best customer service and environment sustainability. Moreover, we always aim to provide customised solutions required by different industries.”
The company also operates within strategic partnerships that provide a number of benefits, including boosting its contribution to the industrial infrastructure and economic developments of the UAE and the surrounding region. “Furthermore, the expansion of the global presence of Emirates Steel constitutes a central part of our strategy,” Remeithi says.
“After establishing our markets in Asia and Africa in the period between 2008 and 2012, we dispatched our first shipment of structural steel to the American and Mexican ports of Huston and Altamira in May 2013 – a development that represented a notable expansion for us, away from our initial markets.”
“Our product quality has enabled us to enter many new markets, including Europe, the Far East, North and South America and other Middle East countries. We aim to be present in all key industrialised markets across the globe with our creative and innovative steel solutions.”
Currently, Emirates Steel products are available in 34 countries, including India, Indonesia, Malaysia, the Netherlands, Germany, Turkey, the US, Canada, Mexico, South Korea and the Arab countries. However, Remethi is quick to assert that this international expansion does not mean any lessening of priorities on the domestic front.
“On the other hand, we have maintained our position in the UAE domestic market through a policy of actively developing long-term supply contracts for finished steel products to meet customer needs. Just-in-time deliveries and an absolute focus on customer service has enabled us to sustain a domestic market share for rebar and wire rod that exceeds 50%, while also significantly expanding our export business, particularly for value-added products.”
The company’s product portfolio includes a range of ‘medium, heavy and jumbo’ sections, used for construction purposes in sectors such as oil & gas offshore and onshore platforms, electrical transmissions and the petrochemical industries. Emirates Steel’s range of structural sections varies from approximately 200mm to 1,016mm in depth.
Its Heavy Sections Mill produces parallel-flange beams, columns and bearing piles with up to 1,016mm web depth and 427-flange width, and parallel-flange channels of up to 430mm depth. This is in addition to the new customised sheet piling designs which are manufactured in grades that meet the EN S355 GP, S390 GP and S430 GP standards, Remethi points out.
“We aim to contribute to the industrialisation and diversification of the UAE economy, in line with Abu Dhabi’s Vision 2030,” the CEO asserts.
“At Emirates Steel, we’re known for having a vision of the future and a clear roadmap as to how we’re going to achieve our objectives. Our core values are Honesty, Integrity, Creativity, Innovation, Quality and the Pursuit of continuous improvement across all aspects of our business. Our vision is to be a world-class steel manufacturer that provides the highest quality products, services and solutions to our customers, while also maximising returns to our shareholders.”
“We deliver value to our stakeholders by following a clear strategy – we target the construction, manufacturing and industrial sectors with their requirements of high-quality steel products, while also maintaining safe and environmentally friendly work practices across our operations. We also create employment opportunities and inspire our workforce to excel,” he says.
Investing in staff development is something of a pet project for Remethi, who is keen to point out that Emirates Steel’s Human Capital Investment programme is something to be justifiably proud of.
“To date, we have achieved 23.1% of Emiratisation, with our 550 UAE nationals working for Emirates Steel,” he says. “Of this, 384 are engineers and technicians, 127 work in admin jobs, while we have 39 students which we’ve given scholarships to.”
“We are aiming to raise this to 30% in the future, and as far as our investment in human capital is concerned, we’re determined to fulfil our ambitions and strategic targets in Emiratisation, in line with Abu Dhabi Vision 2030,” he reinforces.
“As such, we have created partnerships with different education organisations, such as Higher Colleges of Technology, Al Hosn University, UAE University, American Sharjah University, Zayed University, Abu Dhabi University, Al Reef Institute and Vocational Educational Development Centre (VEDC), to build a leading, professional, Emirati workforce that is specialised in the steel industry.
“Such partnerships would also help us in the acquisition of UAE national talent and in career development within the Emirates Steel scholarship programme, as well as in developing skills and expanding horizons to prepare the future leaders of our industry,” Remethi outlines.
Also close to the CEO’s heart is sustainability and environmental awareness. With the global steel industry regarded as a major driver of climate change, Remethi is adamant about Emirates Steel becoming a regional leader in proving that steel can be produced in a safe and sustainable way.
Given that the UAE has already begun work in developing a blueprint for how to incubate and establish a low-carbon, new-energy industry and that the government has taken steps to adopt an approach to use clean technologies, renewable energy and low-carbon solutions, Remethi believes that Emirates Steel must take the lead and show the steel manufacturing industry what can be done.
“In alignment with this vision, Emirates Steel is striving to fulfil its objectives in terms of producing steel in a safe and sustainable way. Included in these priorities is the company’s on-going efforts to utilise the CO2 generated during the iron reduction process at its DRP plants, and its efforts to promote environment and resource conservation.
“As a matter of fact, we’re an integral part of Masdar and ADNOC’s first CO2 capture, usage and storage initiative in the region. CCUS is the first joint venture in the Middle East that develops commercial-scale carbon capture, usage and storage projects.
“It is part of the government’s continued efforts to create a low-carbon steel industry and enhance CO2 management in the UAE. The CCUS project consists of three steps. It begins with the captured CO2 from the Emirates Steel plants; secondly, we compress the CO2 and transport it along the 50km pipeline by Masdar to the oilfields operated by ADNOC; finally, the third and final step is when ADNOC injects the CO2 into their oilfields to enhance oil recovery, while storing the injected CO2 underground.”
This ambitious project will not only enhance oil and gas production in the oilfields, it will also result in the preservation of the UAE’s natural gas for domestic electricity generation and other uses, he explains. It does this by liberating natural methane gas, traditionally used to pressurise oil wells and in oil recovery, to be used for other traditional power generation and water desalination needs.
“Moreover, this project will establish commercial principals for a CO2 industry and demonstrate the technical viability of CO2 operations,” says Remethi.
“It presents a practical approach for energy-consuming industries to lower their carbon footprint. Being part of CCUS, Emirates Steel sets an example in supporting Abu Dhabi’s sustainability objectives, and in assisting the UAE to implement its strategy to reduce carbon emissions through operating environmental friendly heavy industries in the country.”
The core idea of the CCUS project is basically to aim to seize up to 730,000 tons of CO2 annually from the Direct Reduction Plants, which is approximately 55% of the overall CO2 generated by the company, and using that to feed the project when it goes operational.
This makes a huge difference, as seizing up to 730,000 tons of CO2 annually is equivalent to planting more than 100,000 trees, or reducing annual CO2 emissions from about 170,000 cars (which equates to 20% of the capital’s cars), or reducing CO2 emissions from about 100,000 houses.
“This is a massive and significant contribution to Emirates Steel’s carbon footprint and the environment, keeping the UAE in line with its commitment to the Kyoto and Paris Protocols. All in all, it is worth mentioning that the CCUS project is the Middle East’s first commercial scale CCUS facility and the only CCS project outside of North America. Currently, there are only 12 operating CCS or CCUS plants globally,” Remethi concludes proudly.