Saudi Arabia is heading to establish the most substantial integrated steel plate manufacturing Complex in Saudi Arabia, after Saudi Aramco, the global company in the field of energy and chemicals, and Baoshan Iron and Steel Co., Ltd. (Baosteel), the Chinese steel conglomerate, and the Public Investment Fund, announced Signing a shareholder agreement to implement the project.
Subject to the necessary approvals from the relevant regulatory authorities and the closing conditions, the joint venture is expected to be located in Ras Al Khair Industrial City (eastern Saudi Arabia), which is one of the four new special economic zones announced by Prince Mohammed bin Salman bin Abdulaziz, Crown Prince. Prime Minister, Chairman of the Council of Economic and Development Affairs.
The joint Complex project will incorporate the strengths of the Saudi Aramco system in energy and industrial services, the long-standing experience of Baosteel in the steel sheet industry, and the substantial financial and investment expertise of the Public Investment Fund.
The planned Complex will be the first of its kind in Saudi Arabia and the Gulf Cooperation Council region, which provides a system for the steel industry in the area.
The project promotes local industrialization by localizing heavy steel sheet production, transferring knowledge, and creating export opportunities.
Steel sheets production capacity is expected to reach 1.5 million tonnes annually and to be equipped with outstanding facilities, including a direct reduction iron furnace operating by natural gas and an electric arc furnace that reduces carbon dioxide emissions, resulting from the iron manufacturing process by up to 60 per cent compared to a conventional blast furnace.
The DRI plant will be hydrogen compatible without the need for significant equipment modifications, allowing the potential to reduce CO2 emissions by up to 90 per cent in the future.
Engineer Amin Hassan Nasser, President and Chief Executive Officer of Saudi Aramco, said that the project represents an essential addition and a new pillar of industry in the Kingdom after a journey that lasted several years of studies and identification of partners and markets. He indicated that the entrance of steel sheets is among the strategic products as a primary component in various industries.
Engineer Nasser stated that the current situation necessitates these materials importation from abroad. However, after the establishment of the factory, it will meet the needs of the Kingdom and the region, looking forward at the same time to exporting part of the strategic product that will be produced in Ras Al Khair.
He added that the project is expected to add approximately 1,800 direct and indirect jobs, in addition to our goal of achieving a localization rate of up to 80 per cent, indicating that the project’s products are expected to replace annual imports estimated at more than $1.3 billion when it is fully operational.
For his part, Yazeed Alhumied, Deputy Governor and Head of Investments in the Middle East and North Africa at the Public Investment Fund stated that the partnership aims to develop an integrated steel sheet manufacturing facility that will promote industrial development in the Kingdom and enable its role as a supplier in the steel industry.