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1Jun, 2015
Pan Gulf Steel makes ‘cautious’ assessment

Hollow sections and channels in stock at Pan Gulf Steel

Hollow sections and channels in stock at Pan Gulf Steel

 
Pan Gulf Steel, a subsidiary of Pan Gulf Industrial Investments Company and prominent player in the Saudi steel processing industry, believes the kingdom’s growing infrastructure sector will fuel its business growth.

“We cautiously forecast growth of 20 per cent in volume over 2014; it is expected to come from the processed steel business unit,” said the company’s general manager Rizwan Syed.


Syed observed that continued depression in global steel prices and lower project investment in oil and gas and power generation would restrict growth for structural products. “However,” he added, “projects in infrastructure such as the Riyadh Metro, power distribution and construction could support sales growth for flat products and commercial steel.”


“The market seems to be settling down with the award of large infrastructure projects and greenfield development of gas projects. Refinery and power generation and distribution projects as a catalyst would propel activities in positive directions.”

Syed: market settling down

Syed: market settling down


About prospects for the next three years, Syed said investment in deformed bars cut and bend facility in profile making would likely strengthen Pan Gulf Steel’s market share. “The kingdom’s commitment to investing heavily in social sector development such as schools, hospitals and railways will give an impetus to business growth,” he commented. “Stabilisation of energy prices, such as crude oil hovering around $70 per barrel, would propel an expansion of business in the oil, gas and petrochemicals sectors,” he added.


Pan Gulf Steel highlights that its processing facilities, located in Dammam, Jubail and Jeddah, are equipped with cutting-edge technology for processing various products including sheets HR, chequered, aluzinc CR, galvanised and aluminium, hollow sections, steel profiles and flat bars and for producing rebar cut and bend items.


As well as processing, the company serves as a leading stockist of imported structural steel.


The company reported total sales of processed products at 184,000 tonnes in 2014-15 against 160,000 tonnes in the previous year.


For production it used 94,700 tonnes of steel in 2014-15 compared with 88,300 tonnes in the previous year.


It listed its three best-selling products it processed in its plants as EGI and GI sheets, commercial tubes and cold rolled sheets. Sales of EGI and GI sheets totaled 27,200 tonnes in 2014 against 18,300 tonnes in the previous year; commercial tubes (16,100 tonnes vs 13,000 tonnes) and cold rolled sheets (5,700 tonnes vs 5,300 tonnes).

 

SUPPLIES, EXPANSIONS


The company is currently supplying its products to a host of manufacturers  including Saudi Arabian Air Conditioning Manufacturing Company for making air conditioners, Select Mitsubishi (electrical panel board and switchgear), Schneider Electric (transformers and electric switchgear) ABB Electricals (transformers, electric panel boards and switches), Fanar Electricals (electrical switchgear) Tenas Factory (electrical products) and STC (electrical transformers).

Pan Gulf Steel’s Central Structural Steel Yard

Pan Gulf Steel’s Central Structural Steel Yard


Earlier, it completed major supplies to the same companies plus Aramco and Saudi Arabian Refrigeration Company.


Shipments of Pan Gulf Steel products to overseas markets are negligible, said Syed. 


The company expects to meet a future surge in demand by expanding its production capabilities. It has announced it is expanding capacity in cut and bend, enhancing processing for making profiles and implementing three projects for upgradation in its Riyadh and Jeddah plants. A new steel processing area of 16,000 sq m has been booked with Modon in Jeddah where the company has a stockyard of 19,200 sq m. Its Riyadh stockyard of 5,000 sq m will be supplemented by a new one of 20,000 sq m.


The company has stocking and distribution facilities with a stockyard of 140,000 sq m at five different locations across the kingdom.

 

CUTTING-EDGE AND SOURCING


Pan Gulf Steel cited the use of high-standard raw materials and well-controlled processing tolerance as one of its cutting-edge features. Ability to perform ‘just in time’ requirements kingdom-wide and the use of client-certified PLC and CNC controlled processing equipment were also listed as factors for the company’s market success. Among certifications it has acquired is the EN ISO 9001 since 2008.


It sources its raw materials at Saudi Iron & Steel (Heeded), Universal Metal Coating Company and Ittefaq Steel (all in Saudi Arabia), Nippon Steel (Japan). Hyundai Steel and Posco (both in Korea), Emirates Steel (UAE) and Apparam Stainless (Belgium and Finland).