How would you characterize the current state of the steel market?
Overall, 2013 and 2014 have been difficult years for the global steel industry, mainly because of overcapacity, and the economic situation in China—where almost half the global production of steel is located—has been slowing down, which has had an effect on the entire steel industry worldwide. In addition, the European economy has been slowing down over the last two years. However, in this region, steel demand has been, and will always be, at least for the coming years, strong and healthy. In the UAE and the Gulf region in general, there has always been significant demand for steel due to high levels of investment in construction, infrastructure, and energy. If you talk about the Emirates market specifically during 2013 and 2014, we have been seeing relatively stable demand. We have sold what we have produced all over the world and we have a significant domestic market share. From the market point of view, I think we have been doing well.
To what do you attribute your increase in revenues, and what is your strategy to continue this trend moving forward?
With Phase II specifically, the heavy section mill came strongly into play in 2013 as well as in 2014. We produced 316,000 tons of structural steel in 2013, which is significant for a new facility like this. This gave a strong boost to our sales and also to the bottom line profit. For years, we have been planning the diversification of our products, and what I see now, specifically in 2014, is that we are reaping the benefits of our heavy section mill expansion. Our strategy is to really diversify away from rebar, wire rod, and focus on structural steel and perhaps one day on flat steel products.
What have been some of the key markets for Emirates Steel this year?
It varies from product to product. From the rebar point of view, we sold nearly 63% of the product domestically. For sections, I would expect in 2014 to grab 50% of the local UAE market in 2014, while the remainder would be exported abroad. Our main export market is Saudi Arabia. Apart from focusing on our domestic markets, we exert sustained efforts in increasing our exports to regional markets, with a YoY increase of 67%, our most significant export markets being the GCC states. We also sell to the Arab countries, Australasia, the Indian subcontinent, Africa, and Asia. Our newest markets include Europe and the US.
How is the company progressing toward its target to reach 30% Emiratization by 2018?
In 2006, Emiratization at Emirates Steel was at about 9%. Today, we are at 19%, and in few years' time, we expect to reach our 30% target. I think we have really succeeded in encouraging UAE nationals to join the company at different levels, from technical to engineering to administration. We have more than 400 UAE nationals in the company now. Our government mandate is to develop UAE nationals with expertise in the steel industry, which is relatively new in the UAE compared to oil and gas. There are opportunities for UAE nationals within the industrial sector in general and steel in particular, and we are encouraging people to join us and share our strides towards success and prosperity. There are many steel production units here in the country, but integrated steel manufacturing is an entirely new and unique concept to the UAE; it presents a range of opportunities for UAE nationals to gather knowledge and experience.