Dubai-based family firm Al Ghurair Group plans to set up steel plants in Egypt at an estimated cost of up to $1.4-billion to tap the north African country s natural gas and iron ore resources, an Egyptian government official said on Tuesday.
The group was interested in Egypt before, particularly in the iron and steel industry. Today, some of its officials met with the investment minister and the outcome was very positive, the senior investment ministry official told Reuters.
They will be building more than one plant, because of Egypt s location and its abundant reserves of iron ore and gas.
The plants would produce steel, galvanized steel and hot rolled steel products, the official said.
He did not give the capacity of the proposed plants, but said the group will invest $1.4 billion.
Ghurair officials were not immediately available for comment.
An Investment Ministry statement said earlier on Tuesday that the group, a United Arab Emirates firm with activities including real estate and manufacturing, has proposed projects in Egypt s iron and steel industry, adding that it is planning to invest between $700 million and $1.4 billion.
Another source at the ministry refused to disclose the envisaged plants production capacities.
Ghurair is building a 350,000-ton iron and steel plant in Abu Dhabi, the capital of the UAE federation of seven emirates that include regional trade and tourism hub Dubai. The plant is expected to start operation in September to meet demand from the region s construction sector.
The construction industry in the world s biggest oil exporting region is booming with more than $1 trillion of infrastructure projects in the pipeline.
Saudi Arabia s Al-Tuwairqi Group is another company investing in Egypt s steel sector. The company said in March it will start work this year on a 1 million-ton direct reduction iron and steel plant in the Arab world s most populous county.
Egypt went from importing 2 million tons of steel a year, less than 10 years ago, to become an exporter of 900,000 tons of steel in 2006, the ministry of trade and industry said.
Egypt produced about 4.3 million tons of steel in the same year.
The International Iron & Steel Institute (IISI) said Egypt s crude steel output stood at 6 million tons in 2006.
Egypt s Ezz Steel the largest steel producer in the Middle East and North Africa, has said it was expanding the capacity of its local plants by 1.7 million tons of direct reduced iron and 1 million tons of flat iron.
The expansion will increase the company s annual production capacity to 3.2 million tons of flat iron within 18 months from 2.2 million tons at present.
The IISI has said that steel demand in the Middle East is forecast to grow by 9.1 percent this year and a further 8.4 percent in 2008, bringing the region s overall demand in 2008 to 43.6 million tons.
