Gulf Construction Online - RAK Steel expansion planned for year-end

Steel

Aggarwal ... focus on quality

RAK Steel expansion planned for year-end

01 July 2009

RAK Steel, a joint venture of Ras Al Khaimah Investment Authority (Rakia) and Middle East Traders group, has announced that it intends to go ahead with plans to increase by 50 per cent its current production capacity of deformed steel reinforcement bars by the end of this year.
As part of a long-term strategy to cater to the gradual upturn in construction activities across the country, the steel manufacturing facility will invest $165 million to increase production from the current $500,000 to 750,000 tonnes per year.
The energy-efficient, environment-friendly facility also intends to become an integrated steel mill, having already commissioned preliminary planning for the implementation of the expansion initiative.
The increase in production capacity is expected to further boost RAK Steel’s market presence as it currently holds the distinction of being the second largest producer of rebar in the UAE.
“Moreover, while several other companies follow obsolete standards, RAK Steel is one of the few worldwide that have adopted the latest BS specifications, an important factor that will further reinforce RAK Steel’s premium-quality brand in the market,” says Ajay Aggarwal, CEO, RAK Steel.
RAK Steel produces deformed reinforcement bars with diameter ranging from 8 mm to 40 mm in variable lengths of 6 m to 18 m to both British and American standards. The company uses the superior Temperit process for manufacturing rebar, which are certified by the Dubai Central Laboratory Department of Dubai Municipality for product quality and conformance to standards. The company has also secured certification from Cares, a non-profit organisation based in the UK whose quality certification is recognised worldwide.
The rebar are hot rolled in a new highly automatic rolling mill and subjected to online thermo-mechanical treatment called Quenching and Self Tempering (QST). Every RAK Steel bar is made from pure steel billets. Controlled chemistry, supervision by expert engineers and state-of-art process makes the RAK steel rebar of consistent quality, says the company.
Depending on customer requirement, the company provides rebar of BS 4449:2005 Grade B500B, BS 4449:1997 Grade 460B, ASTM A-615 Grade 60 standards and ASTM 1035 – 1035M (MMFX2).
Commenting on the reason for the expansion, Aggarwal says: “There has been a gradual resurgence in construction activities across the UAE, buoyed by the continued growth in tourism and residential development projects in all emirates. RAK Steel has accordingly seen a marked increase in demand and now we are running to full capacity; this has been a key factor that has motivated us to push through with our expansion initiatives.”
He expects the construction market to get back to pre-2008 levels in about two years, and thereafter maintain a growth of around five per cent.
“We believe that the entire country has managed to limit the impact of the global financial crisis through proactive government intervention and various forms of stimulus packages. Therefore, our expansion initiatives are part of Rakia’s grand design to cope with the present and future demand of the construction sector and ultimately complement the development initiatives across different industries, providing the backbone for a truly diversified and robust economy,” he adds.
The integrated steel mill is expected to be set up in the next two or three years.
“To the company, it means we can be more cost-competitive and our dependence on outside raw materials will be reduced. The more raw materials you produce yourself, the more total costs will go down,” he says.
The UAE is currently RAK Steel’s primary market, while it also exports its products to Oman, Saudi Arabia, Bahrain, Qatar and Iran. Exports contribute to 15 per cent of the company’s production while rest of the output is being consumed in the country.
“The continued growth of RAK Steel is a manifestation of Rakia’s success in transforming Ras Al Khaimah into an investment magnet,” concludes Aggarwal.
Rakia has attracted over $2.2 billion in foreign capital from international companies that have set up businesses in the emirate. Furthermore, Rakia is responsible for promoting the development of the Industrial Zone and Free Zone in Al Hamra, and Industrial Park in Al Ghayl, where RAK Steel is located.