Gulf Construction Online - Nass secures latest deal on Sulb plant

Steel

Work in progress ... the latest contract involves a civil integration package.

Nass secures latest deal on Sulb plant

A $13-million civil work contract is among the latest packages to be awarded by Sulb, as its $1.2-billion steel plant in Bahrain gears up for production in the second half of next year.

01 July 2011

BAHRAIN’S Nass Contracting has been awarded a $13-million civil integration package on the upcoming United Steel Company (Sulb) plant, which will be Middle East’s first fully-integrated producer of medium and heavy beams and structural steel sections once operational.

The $1.2-billion steel plant is being built in Bahrain by United Steel Company (Sulb), a joint venture between Bahrain-based Gulf United Steel Holding Company (better known as Foulath) and Japan’s Yamato Kogyo Company, and is set for completion in the second half of 2012. Foulath holds 51 per cent of Sulb’s shares and Yamato Kogyo 49 per cent.

The integrated production complex comprises a direct reduced iron (DRI) plant with a nameplate capacity of 1.5 million tonnes per year (tpy) and design capacity of 1.8 million tpy; a melt shop with nameplate capacity of 0.80 million tpy and design capacity of 1.2 million tpy; and a heavy-section rolling mill with nameplate capacity of 0.60 million tpy and design capacity of 1 million tpy. These have been contracted to different companies under engineering, procurement and construction contracts awarded in March 2010.

Kobe Steel of Japan and Midrex of the US are building the DRI plant while Germany’s SMS Meer and SMS Concast of Switzerland with Korea’s Samsung Engineering will construct the melt shop and medium and heavy-sections rolling mill. The melt shop and the heavy-section rolling mill are due to begin production in September and October 2012, respectively, while the DRI plant is scheduled for start-up in January 2013.

The signing ceremony for the Nass package was attended by Khalid Al Qadeeri, Sulb’s chairman and managing director; Hiroyuki Inoue, president of Yamato Steel Company; Abdulla Ahmed Nass, chairman of Nass; Sameer Abdulla Nass, managing director of Nass, and David Anthony, Nass general manager. The package includes the construction of roads and pavements, lighting, storm water drainage, sewage treatment, potable water systems, gates, weigh bridges and non-process buildings for the Sulb plant, which is under construction on Foulath’s existing 1.3-million-sq-m state-of-the-art steel complex located in the Hidd Industrial Area. The Foulath complex also includes iron pellets producer Gulf Industrial Investment Company (GIIC) and cold-rolled stainless steel manufacturer United Stainless Steel Company (Usco). GIIC and Usco, with annual production capacities of 12 million tonnes and 100,000 tonnes, respectively along with Sulb signify an integrated value chain from iron pellets to final steel products.

Men at work ... construction work on the Sulb plant started in July last year.

Al Qadeeri says the Nass award is another major development for Sulb. “Nass has a strong track record of work with some of the region’s largest industrial projects and we welcome them on board.”

Nass has also been involved with the construction of GIIC’s main jetty and other works.

He adds that work on Sulb plant was launched in July 2010, is well under way and is on schedule to begin commercial operations in the second half of 2012.

“This is a ground-breaking project for the Middle East’s steel industry and for Foulath, which aims to create the world’s first fully-integrated steel production facility with manufacturing capability extending from iron ore pelletising to final steel products that will not only be of the highest standard and quality but also the most competitive in terms of cost,” Al Qadeeri says.

He says Sulb has a total cost advantage $252 per tonne from various standpoints including operations and shipping compared to a similar facility built in China. The plant’s total capacity will take care of 20 per cent of the annual four million tonnes of imports of similar products into the region.

Al Qadeeri also notes that the plant is being set up at a time when construction activity will intensify substantially in the wake of plans to build five economic cities in Saudi Arabia, and infrastructure works worth $33 billion in Kuwait and $65 billion in Qatar. Similarly, a $20 billion support package by the GCC will spur economic growth in Bahrain and Oman, he says.

Speaking of environmental regulations regarding the construction and operation of Sulb, Al Qadeeri says the builders were meeting not only Bahrain’s regulations but those of their own home states and international standards.

“Sulb has earmarked $20 million more than is required to make the integrated complex environmentally secure. A 20-m-high wall has been built around the plant, the world’s only steel plant to have such a protective barrier,” he says.

Established in 1963 by Abdullah Ahmed Nass, Nass Contracting – a division of Nass Corporation – has undertaken a wide range of construction projects for both the public and private sectors and has made a major contribution to the development of Bahrain’s commercial and industrial infrastructure. Nass Corporation was established in September 2005.

Foulath, the holding company, has Gulf Investment Corporation of Kuwait as its main shareholder with 50 per cent of the shareholding. Qatar Steel holds 25 per cent while three Kuwaiti companies – Al Kharafi Group, the National Industrial Group and the Kuwait Foundry – own the remainder shares.