gcc industry report - gulfbase€¦ · this is the abu dhabi oil refining company (takreer). the...
TRANSCRIPT
Gulf Capital Group (DIFC) Limited
Dubai International Financial Center
Registered Office – Offices 5 & 6, Level 4, Precinct Building 3,
P O Box – 214851, Dubai, UAE
Tel: +971 4 363 5730 Telefax: +971 4 363 5739
Website: www.gulfcapitalgroup.com
Email: [email protected]
GCG is regulated by the Dubai Financial Services Authority
INTRODUCTION...........................................................................................................................1
A building here, a building there .......................................................................................................... 1
Chemicals & Plastics – Being smart about oil ..................................................................................... 1
Market Dynamics................................................................................................................................... 2
Future Projects ...................................................................................................................................... 2
ALUMINUM ...................................................................................................................................3
Production Shift..................................................................................................................................... 4
Aluminum Facts .................................................................................................................................... 5
Aluminum in the GCC........................................................................................................................... 6
Raw Material Procurement............................................................................................................................8
Popularity of Extruded Products ...................................................................................................................8
GCC Aluminum Projects................................................................................................................................9
United Arab Emirates...................................................................................................................................11
Bahrain .........................................................................................................................................................14
Qatar .............................................................................................................................................................16
Oman.............................................................................................................................................................18
Kuwait ...........................................................................................................................................................20
STEEL ...........................................................................................................................................24
The History of Steel ............................................................................................................................. 24
Global Production ............................................................................................................................... 26
Steel in the GCC .................................................................................................................................. 28
Reinforcement Bars- Strong Demand .........................................................................................................29
United Arab Emirates...................................................................................................................................31
Bahrain .........................................................................................................................................................34
Qatar .............................................................................................................................................................36
Kuwait ...........................................................................................................................................................39
Saudi Arabia .................................................................................................................................................41
CEMENT.......................................................................................................................................44
Cement Facts ....................................................................................................................................... 44
Global Cement Production.................................................................................................................. 46
Cement in the GCC.............................................................................................................................. 47
GCC Cement Projects...................................................................................................................................47
United Arab Emirates...................................................................................................................................50
Bahrain .........................................................................................................................................................53
TABLE OF CONTENTS
Qatar .............................................................................................................................................................55
Oman.............................................................................................................................................................57
Kuwait ...........................................................................................................................................................59
Saudi Arabia .................................................................................................................................................60
CHEMICALS AND PLASTICS...................................................................................................64
Chemicals and Plastics in the GCC .................................................................................................... 65
United Arab Emirates...................................................................................................................................70
Bahrain .........................................................................................................................................................73
Qatar .............................................................................................................................................................75
Oman.............................................................................................................................................................79
Kuwait ...........................................................................................................................................................82
Saudi Arabia .................................................................................................................................................85
APPENDIX A – KEY COMPANY OVERVIEWS.......................................................................88
Aluminum ............................................................................................................................................ 88
Steel ...................................................................................................................................................... 94
Cement ............................................................................................................................................... 110
Chemicals and Plastics...................................................................................................................... 118
January, 2008
GCC Industry Report 1
INTRODUCTION
Rampant construction activity and cheap energy are the factors driving industrial
growth in the GCC. Oil revenues have enabled GCC countries to diversify their
economies and strengthen their positions in a variety of sectors. The Industrial sector
is one of the integral areas of diversification and this includes the aluminum, steel,
cement, chemicals and plastics industries among others. As a result of ongoing
regional construction activity, major construction materials such as aluminum, steel
and cement are highly sought after in the GCC markets. Due to abundant oil and gas
reserves the GCC states are also producing a variety of chemicals and plastics
products.
A building here, a building there
The current and expected future capacities of the main construction materials
aluminum, steel and cement highlight the pace of construction activity in the region.
Exhibit 0.1 displays the current and future capacities for industries in the region.
1.7
14.7
57.6
6.1
44.9
80.8
Aluminum Steel Cement
Actual Expected
The final capacities for these industries will be realized by 2012.
Chemicals & Plastics – Being smart about oil
Companies in the GCC which were traditionally involved only in upstream oil and
gas activities are increasingly becoming involved in the production of plastics and
chemicals which rely on oil and gas as inputs in their production. One example of
this is the Abu Dhabi Oil Refining Company (TAKREER). The company owns 2 oil
refineries in Abu Dhabi and is now expanding into the downstream sector. GCC
chemicals capacity is set to increase from a current 62 million tons per year to 111
tons per year by 2012.
Exhibit 0.1: GCC Current and Future Capacities (Million tons)
Source: Zawya, Company Websites, GCG Analysis
Local industries are
aiming to quench the
demand in the GCC
for construction
materials
January, 2008
GCC Industry Report 2
Market Dynamics
Each industry is uniquely positioned and the market supply and demand varies from
industry to industry, from place to place. For example, suppliers can specialize in
either upstream production or downstream activities. The former involving those
processes that lay the foundation for the industry and the latter involving those
processes that result in end-user products. For example, in the aluminum industry,
only two GCC states have primary producing companies while in the cement and
steel industries, markets are highly fragmented with many primary producers.
Future Projects
Suppliers are keeping up with the pace of rising demand in the GCC by planning
projects in virtually all industries. Exhibit 0.2 displays the number of projects
planned for each industry.
42
15
119
Chemicals&Plastics Steel Cement Aluminum
Exhibit 0.2: GCC Future Planned Industrial Projects
Source: Zawya, Company Websites, GCG Analysis
Note: The Chemicals & Plastics bar includes the highest capacity projects in each GCC
country. Total projects are 114.
Industrial projects are
springing up all over
the GCC and
chemicals and plastics
projects exceed the
rest in numbers
January, 2008
GCC Industry Report 3
ALUMINUM
Aluminum has emerged as one of the most important metals to be used in the
twenty-first century. Its attractive characteristics — light, strong, anti-corrosive,
highly conductive, malleable, and recyclable — have made it perfectly suitable for a
remarkable number of applications.
While it is the third most abundant element in the earth’s crust, its use in
manufacturing and construction activities has arrived surprisingly late on the scene.
This is partially due to the sophisticated technological process needed to isolate the
metal from the various oxides in which it is naturally found. Also, iron and steel have
emerged as the building materials of choice since the days of the Industrial
Revolution. Various global advancements have spurred the development and use of
aluminum to date; from the early military build up of the previous century to the
recent emergence of China’s insatiable appetite.
Exhibit 1.1 depicts the global demand for the commodity along with significant
developments affecting it.
Clearly, there has been significant growth in the demand for aluminum over the last
century. Primary production increased from a negligible amount in 1900 to over 30
million tons in the last few years.1 Aluminum is a significant input in the production
of many manufacturing and consumer goods.
1 International Aluminum Institute (IAI)
Exhibit 1.1: Global Aluminum Production Timeline
Source: IAI, Alcan, GCG Analysis
0
5
10
15
20
25
30
35
19
00
19
10
19
20
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
Wo
rld
Pri
ma
ry P
rod
uc
tio
n (
Mt)
.
MilitaryBuild-up
BuildingApplications
BeverageCans
OilCrises
Automobiles
China
0
5
10
15
20
25
30
35
19
00
19
10
19
20
19
30
19
40
19
50
19
60
19
70
19
80
19
90
20
00
Wo
rld
Pri
ma
ry P
rod
uc
tio
n (
Mt)
.
MilitaryBuild-up
BuildingApplications
BeverageCans
OilCrises
Automobiles
China
In recent times,
aluminum production
has been steadily
rising
January, 2008
GCC Industry Report 4
There are few other materials with as many diverse uses as aluminum, and because
of this reason its demand has managed to avoid significant ebbs and flows associated
with underlying business cycle fluctuations. The only sustained slowdown the
aluminum industry experienced was during the 1970’s and 1980’s when the global
energy crises created complications. The 1970’s oil crisis came about when the
Organization of Petroleum Exporting Countries (OPEC) decided to cut back on
exports to certain western countries and also raise the price of oil. As a result, a rise
in inflation and unemployment ensued. The 1980’s energy crisis came about when
political conflicts in Iran caused production there to almost stop, reducing the supply
of oil in the global market and thus raising the price.
Production Shift
As is the case with most commodities these days, emerging markets – China in
particular, are fuelling the growth in global demand for aluminum. With its near 1.3
billion people and a Gross Domestic Product (GDP) growing at 10% annually2,
China is developing a voracious appetite for raw materials and metals.
Exhibit 1.2 depicts the production shift for the commodity and a breakdown of the
absolute contribution of each region.
2 International Monetary Fund, World Economic Outlook Database, October 2007
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Over the past six years, China has represented
65% of the net increase in primary production
North America
Latin America
W. Europe
Asia
Oceania
Africa
CIS and
E/C Europe
China
W
e
s
t
e
r
n
W
o
r
l
d
E
a
s
t
B
l
o
c
ktpa
Exhibit 1.2: Aluminum Production – Regional Breakdown 1996-2006
Source: IAI, Alcan, GCG Analysis
Since 2002, China’s
aluminum production
has been picking up
January, 2008
GCC Industry Report 5
Increased production in China has been the story over the last decade; Chinese
production is responsible for over half of the increase in global production since
1996. Generally speaking, a trend of production shifting from the West to the East
has emerged. In fact, not only has Eastern production increased but Western
production has simultaneously decreased. The net result underscores the production
redistribution trend.
Aluminum Facts
Aluminum can be produced via scrap metal (recycled aluminum) or via primary
production using bauxite. Regardless of the process used, molten aluminum is cast
into ingots which are then used in the production of extruded and rolled products.
Extruded products are used in the making of prefabricated buildings, window and
door frame systems, curtain walling and a variety of facades. Rolled products include
foil, sheet and plate which are used packaging, transportation, electrical and
household applications.
Exhibit 1.3 displays the value chain for aluminum.
Exhibit 1.3: Aluminum Products Value Chain
Source: The Aluminum Association, European Aluminum Association, GCG Analysis
Primary Aluminum
Slabs, Billets
Extruded Products Rolled Products
Fabricated Products
Powder and Paste
Aluminum products
are used in every
industry imaginable
January, 2008
GCC Industry Report 6
Aluminum in the GCC
While most of the GCC countries are currently planning major aluminum projects,
only the United Arab Emirates and Bahrain are presently producing primary
aluminum. The two primary aluminum smelting companies in the region are United
Arab Emirates’ DUBAL and Bahrain’s ALBA and together they are presently
producing over 1.7 million tons3 of aluminum representing the entire region’s
primary aluminum production. However, a number of projects on the horizon will
change the landscape of the industry into a much more fragmented one than it
currently is.
Exhibit 1.4 displays the current aluminum capacity in the region and the capacity
once all future projects are complete.
Similar to the trend occurring in China, aluminum production is shifting to GCC
countries. There are two primary reasons why the GCC, in particular, is an attractive
environment for aluminum production facilities, namely:
1) Comparative Advantage – Energy: The GCC region has substantial oil and
gas reserves. Given that aluminum smelting is an energy intensive process
(one quarter to one third of production cost)4, the region has a natural
advantage that has begun to be profitably exploited by both local and
international players.
3 Company Websites
4 The Aluminium Association, 2004
Exhibit 1.4: GCC Annual Aluminum Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Oman, Qatar and
KSA member states
are all planning a
smelting complex
1.7
2006A
6.1
2012E
UAE
Oman
Saudi Arabia
Bahrain
Qatar
1.2
0.86
3
0.87
0.18
0.51
1.5
GCC Total
Current Future
0.12
Kuwait
January, 2008
GCC Industry Report 7
Exhibit 1.5 displays a breakdown of aluminum smelting costs.
Raw Materials
50%
Energy
30%
Other
20%
2) Proximity to Key Markets: The petrodollar influx of the last few years has
fuelled substantial economic and infrastructure development. The resulting
increase in domestic demand, coupled with the region’s proximity to
Europe and the Subcontinent, which serve as key export markets,
has proven to create juicy opportunities for smelter operations in this
region.
Exhibit 1.6 displays the key global markets in proximity to the GCC.
Exhibit 1.6: Key Markets in Proximity to the GCC
Source: GCG Analysis
GCC
Africa
India
China
Europe
Russia
SE Asia
Exhibit 1.5: Aluminum Production Costs – Global Average
Source: Industry Sources, GCG Analysis
The GCC has a
significant cost
advantage when it
comes to one of the
primary cost
components – energy.
The GCC has a prime
location in relation to
lucrative export
markets
January, 2008
GCC Industry Report 8
Raw Material Procurement
Since aluminum is extremely reactive, it is not found in its original form but as one
of a selection of around 250 minerals. Hence, one challenge that exists for upstream
aluminum producers in the GCC is the limited access to the chief raw material and
principle ore involved in the production of aluminum – bauxite. To this end, GCC
states have forged alliances and developed units abroad to maintain a sufficient
supply of the raw material.
Popularity of Extruded Products
Aluminum is highly suited to the extrusion process due to its malleability
characteristics at high temperatures and thus it can be cast, rolled or extruded into an
infinite variety of shapes. The term ‘extrusion’ is used interchangeably to refer to
both the end-products and the process by which the products are created. The
construction industry has a high requirement for aluminum extrusions or customized
aluminum profiles. Given the fact that construction is a rampant activity in the GCC,
companies have sprung up to quench the demand in the region for extruded
aluminum products.
January, 2008
GCC Industry Report 9
GCC Aluminum Projects
Given the advantages of establishing smelting operations in the GCC it is
understandable that each of the member states that do not currently have smelting
operations, except Kuwait, has begun planning for its respective aluminum industry.
Exhibit 1.7 displays the total number of projects in the GCC. The graph shows the
total number of projects for each country and the share of each country in the total
project pie.
9
1
2
3
4
Qatar Oman Saudi Arabia UAE Total
33%
11%
11%
44%
The previous graph shows that several projects are underway in the GCC region,
with Saudi Arabia, Qatar and Oman establishing aluminum production operations for
the first time. Exhibit 1.8 displays the current scenario of aluminum projects in the
GCC with greater detail.
Name Yearly Capacity (tons) Completion Date Country
DIC Aluminum Glass Factory N/A 2007 UAE
Sohar Aluminum Company Smelter 330,000 2008 Oman
Emirates Aluminum Smelter (EMAL) 1.4 million 2010 UAE
Nova Aluminum Processing Plant 135,000 2010 UAE
Jizan Aluminum Complex 700,000 2010 KSA
Al Ahsa - Jubail Aluminum Chip Manufacturing 45,000 2010 KSA
Qatalum Aluminum Smelter 585,000 2010 Qatar
Ruwais Aluminum Smelter 550,000 2011 UAE
Garmco Aluminum Rolling Mill 160,000 2011 Oman
Maaden Integrated Aluminum Complex 720,000 2012 KSA
In addition to having the most number of planned projects, the UAE and Saudi
Arabia also have the highest number of downstream aluminum companies.
Exhibit 1.9 displays the total number of companies in each country and the share of
each country in the total pie.
Exhibit 1.8: GCC Aluminum Project Details
Source: Zawya, GCG Analysis
Exhibit 1.7: GCC Aluminum Smelter Projects – Regional Breakdown
Source: Zawya, GCG Analysis
The UAE and Saudi
Arabia are planning
the maximum number
of smelting projects
The UAE, KSA and
Qatar are planning
projects with the
highest capacities in
the GCC
January, 2008
GCC Industry Report 10
41
13
5
7
11
14
Oman Qatar Kuwait Bahrain UAE Saudi
Arabia
Total
7%
2%12%
17%
27%
34%
Exhibit 1.9: GCC Aluminum Smelting and Non-Smelting Companies
Source: Zawya, GCG Analysis
All GCC states have
downstream
companies with UAE
and Bahrain having
primary production
capabilities
January, 2008
GCC Industry Report 11
United Arab Emirates
Overview
Aluminum is one of the oldest and most important non-petroleum industries in the
United Arab Emirates. The sector has spearheaded the country’s drive to diversify its
economy away from the oil and gas sector and to gain a foothold in this highly
important industry. The availability of raw materials and major resources used in the
production is qualifying the country to be dominant in the GCC aluminum industry.
Current Infrastructure
The UAE currently has eleven companies specializing in upstream and downstream
aluminum related activities5. Among these DUBAL is the only primary production
facility in the UAE. Exhibit 1.10 displays the total current and future annual
production of aluminum in the UAE.
Although Dubai has a number of downstream companies, there are only two players
in the market with significant production levels.
Exhibit 1.11 displays the current share of existing companies and the future share
which will result after all planned projects are operational.
5 Zawya, GCG Analysis
Exhibit 1.10: UAE Aluminum Metal and Related Production (Million tons)
Source: DUBAL, Zawya, GCG Analysis
Projects coming on
stream will represent
almost a 250%
increase in capacity to
the aluminum
industry in the UAE
.86
3
Current Future
2006A 2011E
January, 2008
GCC Industry Report 12
7%
93%
52%
18%
23%
3%
4%
2006A 2011E
Gulf Extrusions Dubal Noval Ruwais Mubadala (EMAL)
The above graph highlights the change in market share of the existing two players
which will result once existing players complete capacity expansions and once new
players enter the market. For example, after three new players enter the market,
DUBAL’s market share will decrease from a current 93% to an estimated 52% in 5
years.
Activities of Existing Companies
As mentioned earlier, DUBAL is the only upstream (i.e. production of aluminum
metal) company in the UAE and the other companies are involved in various
downstream (i.e. production of end-products) activities. Exhibit 1.12 displays a
matrix of activities.
Company Upstream
Primary Prod. Extrusions Façade Syst. Bev. Cans Alum. & Glass Misc.
DUBAL ����
Gulf Extrusions ����
Alumco ���� ����
Alico ����
Alutec
Al Fahya (AFAF) ����
Bin Hussain ����
Hamarain and Partners
Rigidal ����
Sunrise Metal Coating ����
Thomas Bennett Gulf ����
Fabricated Metal Products
Exhibit 1.12: Aluminum Activity Matrix - UAE
Source: Zawya, GCG Analysis
Exhibit 1.11: UAE Aluminum Company Market Share Comparison
Source: Company Websites, Zawya, GCG Analysis
Aluminum companies
in the UAE produce a
variety of downstream
products
The UAE aluminum
industry landscape
will change quite
significantly as new
players come on board
January, 2008
GCC Industry Report 13
Major Up and Coming Projects6
The country’s capital, Abu Dhabi, has made a grand entrance into the aluminum
production scene over the past few years. Projects on the drawing board call for the
Emirate to become one of the largest aluminum producers in the world over the next
decade. Some of the major projects are:
1. Emirates Aluminum (EMAL)
In early 2007, Mubadala investment company and Dubai Aluminum came together
to create Emirates Aluminum (EMAL). The AED 33 billion project will have an
initial capacity of 700,000 tpy by 2010 and gradually increase its capacity to 1.4
million tpy in the years that follow. DUBAL’s technological expertise will play a
critical role in this project.
2. Ruwais Aluminum Smelter
During late 2006, General Holding Corporation and Rio Tinto Aluminum formed the
Abu Dhabi Aluminum Company (ADALCO) under which the Ruwais Aluminum
Smelter Project was launched. The project, valued at approximately AED 70 billion,
will have an initial capacity of 550,000 tpy which will be increased to 2 million tpy
over several phases. The first phase of the project is expected to be completed in
2011.
Upon completion of these two mega projects, the UAE will become the GCC’s top
aluminum producer with a total capacity of over 3 million tons.
6 Zawya, Company Websites
January, 2008
GCC Industry Report 14
Bahrain
Overview
In addition to the UAE, Bahrain is currently producing aluminum as well as a variety
of aluminum products. Bahrain has incorporated industry-based business models in
order to diversify the sources of income in its economy and the aluminum industry
has been one successful way to accomplish this goal. There is one primary
production facility in Bahrain and six companies that rely on a large portion of the
primary production output as a feedstock for their aluminum products.7
Current Infrastructure
Bahrain is currently producing aluminum via smelters operated by Aluminum
Bahrain or ALBA. Production of aluminum in Bahrain was over 870,000 tons for
2006 based on the production of ALBA, Bahrain’s only aluminum producer.8 There
are also a number of specialized or downstream production facilities in Bahrain that
rely on aluminum from ALBA for their production. ALBA supplies approximately
50% of its aluminum to support the downstream aluminum industry in Bahrain.
Exhibit 1.13 displays total current aluminum production for all aluminum companies
in Bahrain.
No new future projects have been planned in Bahrain and all increases in capacity
will come from existing plant expansions.
Exhibit 1.14 displays the structure and current production of selected companies in
Bahrain.
7 Zawya, GCG Analysis
8 Aluminium Bahrain
Exhibit 1.13: Bahrain Aluminum Production (Thousand tons)
Source: ALBA, Zawya, GCG Analysis
Downstream
production is a
growing industry in
Bahrain 872k
2006A
Current
January, 2008
GCC Industry Report 15
s
Activities of Existing Companies
Exhibit 1.15 highlights the activity matrix for aluminum companies in Bahrain.
Company Upstream
Primary Prod. Extrusions Façade Syst. Bev. Cans Alum. & Glass Misc.
ALBA ����
Balexco ����
Bamco
Bahrain Atomisers ����
Bassam Aluminum ����
Midal Cables ���� ����
Garmco ����
Fabricated Metal Products
Exhibit 1.14: Aluminum Company Market Share Comparison (‘000 tons)
Source: Company Websites, Zawya, GCG Analysis
Exhibit 1.15: Aluminum Activity Matrix - Bahrain
Source: Zawya, GCG Analysis
ALBA is one of two
primary producers in
the GCC
There are several
downstream
production companies
in Bahrain
872
ALBA
306
26
120
160
8%
39%
52%
Balexco Midal Cables Garmco Total
Approx. 50% Prod.
January, 2008
GCC Industry Report 16
Qatar
Overview
Qatar has the world’s third-largest gas reserves9. It therefore comes as no surprise
that the State has encouraged and invested heavily in utilizing its natural resources to
establish a healthy manufacturing and industrial sector. Qatar has three downstream
aluminum companies and although Qatar does not currently have aluminum
producing capabilities, an exciting project is underway, namely, Qatalum.
Current Infrastructure
Qatar has three companies specializing in downstream production activities. These
are Aluglass, Alutec and Ishaq and Sons Co.10
These are all small companies that do
not have significant production numbers.
Exhibit 1.16 displays expected future aluminum production in Qatar.
The future production number represents the production which will be available once
Qatar’s major aluminum project, Qatalum, begins production.
9 Ministry of Economy and Commerce, State of Qatar
10 Zawya, GCG Analysis
Exhibit 1.16: Qatar Future Aluminum Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
2010E
1.2
Qatar has
one major aluminum
project in the pipeline
January, 2008
GCC Industry Report 17
Activities of Existing Companies
Exhibit 1.17 highlights the activity matrix for the three companies in Qatar.
Company Upstream
Primary Production Extrusions Façade Systems Beverage Cans Aluminum and Glass Misc.
Aluglass ���� ����
ALU-TEC ����
Ishaq and Sons Co. ����
Fabricated Metal Products
Major Up and Coming Projects11
1. Qatalum
In 2006 it was announced that government owned oil and gas company Qatar
Petroleum (QP), and Hydro, a Norwegian aluminum and renewable energy company,
initiated a new aluminum smelter project called Qatalum. The former company will
provide the energy component and the latter company will provide the technology
and expertise for producing extrusion ingles –the plants’ main product. The cost of
the project is estimated to be USD 4.8 billion and will include an aluminum smelter
and a 1350 megawatt power plant. The final capacity of the smelter will be 1.2
million tpy by 2010 and the first phase capacity will be 585,000 tpy. Construction of
the smelter is already underway.
Industrial Cities
Mesaieed Industrial City (MIC) and Ras Laffan Industrial City are the two main
industrial cities in the State of Qatar. The other two are Doha Industrial Estate and
Dukhan Petroleum City. MIC was set up to provide the services and infrastructure
for all present and future industries in Qatar. The Qatalum project will be established
in this industrial base. The Ras Laffan Industrial City is the State’s most recent
industrial city and the port at Ras Laffan is the world's largest Liquefied Natural Gas
(LNG) exporting facility.
11
Zawya, Company Websites
Exhibit 1.17: Aluminum Activity Matrix - Qatar
Source: Zawya, GCG Analysis
The aluminum
industry is quite small
in Qatar
January, 2008
GCC Industry Report 18
Oman
Overview
The Sultanate of Oman began plans to diversify its economy soon after the decline of
oil prices in 1999. Sources of non-oil income such as natural gas, industry,
manufacturing, tourism and the private sector formed the basis of the diversification
framework. Manufacturing is currently one of the key diversification areas of the
economy. Similar to Qatar, Oman does not have a primary metal production facility,
but a project is in the pipeline.
Current Infrastructure
Oman currently has a single downstream aluminum player and a single aluminum
project on the way. Exhibit 1.18 displays current and future capacity of aluminum in
the Sultanate.
Exhibit 1.19 compares the market scenario in Oman today and once the new project
is finalized, which will be the first primary production facility in Oman.
Exhibit 1.18: Oman Current and Future Aluminum Production (‘000 tons)
Source: Company Websites, Zawya, GCG Analysis
18k
508k
Current Future
2011E2006A
Downstream
production is low and
upstream production
is expected to begin in
a few years
January, 2008
GCC Industry Report 19
95%
5%
100%
2006A 2008E
Napco Sohar
Major Up and Coming Projects12
1. Sohar Aluminum Company
The company was established in 2004 with the mission to build Oman’s first
aluminum smelter. Oman Oil Company, Abu Dhabi Water & Electricity Authority,
and the global aluminum leader Alcan came together to form the Sohar Aluminum
Company (SAC) project. The smelter will have an initial capacity of 330,000 tpy and
will begin operations mid 2008. This smelter will also have a dedicated gas based
power plant providing between 800 and 1400 megawatts of power.
Sohar Industrial Estate and Sohar Port
The purpose of the Sohar Industrial Estate is to serve as a site for all the major
industries and their related entities. In addition to the Sohar Port which serves the
Sohar Industrial Estate, Oman has many ports. The country’s coastline which
extends 1,700 kilometers from the Arabian Sea to the Gulf of Oman has encouraged
shipping activity.
12
Zawya, Company Websites
Exhibit 1.19: Oman Aluminum Company Market Share Comparison
Source: Company Websites, GCG Analysis
National Aluminum
Products Company is
the only aluminum
company in Oman
and manufactures
extruded products
January, 2008
GCC Industry Report 20
Kuwait
Overview
According to the Public Authority for Industry (PAI), the industrial sector is one of
the most important sources of national income and the main pillar of the economy of
the State of Kuwait. With regards to the aluminum industry, the State of Kuwait has
five small to mid-size downstream aluminum businesses.
Current Infrastructure
Kuwait has five downstream aluminum companies.13
Exhibit 1.20 displays the
current downstream production in Kuwait.
Currently there are no planned projects in Kuwait.
Activities of Existing Companies
Exhibit 1.21 displays the activity matrix for the companies in Kuwait.
Company Upstream
Primary Prod. Extrusions Façade Syst. Bev. Cans Alum. & Glass Misc.
Kalexco ���� ����
Al Hadi Aluminum ����
Aluminum Industries Co. ���� ����
Arabian Light Metals ���� ����
Kuwait Aluminum Co. ���� ����
Fabricated Metal Products
13
Zawya, GCG Analysis
Exhibit 1.21: Aluminum Activity Matrix - Kuwait
Source: Company Websites, Zawya, GCG Analysis
Exhibit 1.20: Kuwait Aluminum Production (Thousand tons)
Source: Zawya, GCG Analysis
Production quantities
of downstream
aluminum products
are not significant
Most companies are
involved in the
distribution of
aluminum products
rather than primary
production
2006A
Current
12
January, 2008
GCC Industry Report 21
Saudi Arabia
Overview
Saudi Arabia is the only state in the GCC that has bauxite deposits. The deposits are
located in the north-central region of Saudi Arabia known as Az Zabirah. The
amount of bauxite reserves is 101.8 Mt.14
In order to access the deposits road and rail
access is necessary. Currently the infrastructure to access the deposits has not been
set up and due to this barrier no aluminum industry has been established yet,
however, a number of downstream players exist and a few major projects will be
finalized in the near future.
Current Infrastructure
The Kingdom has the largest number of downstream players in the GCC aluminum
industry. There are fourteen downstream companies specializing in a variety of
aluminum-related activities.15
Exhibit 1.22 displays primary metal production capacity in Saudi Arabia.
There are three planned projects in Saudi Arabia having a total capacity of over 1.4
million. Exhibit 1.23 highlights the market share that each of these projects, once
completed, will have.
14
Ministry of Petroleum and Mineral Resources, Deputy Ministry for Mineral Resources 15
Zawya, GCG Analysis
Exhibit 1.22: Saudi Arabia Aluminum Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Currently Saudi
Arabia’s natural
resources remain
untapped due to lack
of necessary
infrastructure
Saudi Arabia
1.5
Future
January, 2008
GCC Industry Report 22
1,465
720
700
45
49%
48%
3%
Al Ahsa Chip Manu. Jizan Aluminum Maaden Complex Total
The above graph depicts that the Ma’aden Integrated Aluminum complex will be the
largest among the planned projects. The Complex will not only be the largest project
in Saudi Arabia but also one of the largest in the GCC.
Activities of Existing Companies
Exhibit 1.24 displays the activity matrix for the existing companies in Saudi Arabia.
Company
Mining Primary Production Extrusions Façade Systems Aluminum and Glass Misc.
Al Muhaidib ����
Alumaco ����
Alupco ���� ����
Kafco ����
Asamco ����
Madarioun Alumco ����
National Aluminum ����
Nafcel ����
Ramah Aluminum ���� ����
Riyadh Aluminum ����
Salumco ���� ����
Sgapco ����
Uacan ����
Crown Jeddah Co. ����
Al Waffa ���� ����
Fabricated Metal ProductsUpstream
Exhibit 1.24: Aluminum Activity Matrix - KSA
Exhibit 1.23: Aluminum Projects Market Share (Thousand tons)
Source: Company Websites, Zawya, GCG Analysis
The two biggest
projects will add over
1.4 million tpy to the
KSA’s current
aluminum capacity
Saudi Arabian
aluminum companies
produce a variety of
aluminum products
Source: Company Websites, Zawya, GCG Analysis
January, 2008
GCC Industry Report 23
Major Up and Coming Projects16
1. Ma’aden Az Zabira Aluminum Project
In order to capitalize the region’s significant bauxite reserves a bauxite mine,
alumina refinery and aluminum smelter are all being built via a USD 7 billion project
undertaken by the Saudi Arabian Mining Company also known as Ma’aden. Rail
and road access linking the mine to the refinery/smelter complex will be provided by
the Ministry of Finance. The smelter will have a capacity of 720,000 tpy and
Canada’s Alcan will be providing the refinery and smelter technology. A power and
desalination complex and a port will also be built. The project is scheduled to begin
operations in 2011.
2. Jazan Aluminum Smelter
Two thirds of the Jazan Economic City is a dedicated industrial zone. One of the
projects taking place will be the construction of an aluminum complex consisting of
a smelter with a capacity of 700,000 tpy and an integrated alumina refinery. The
project is scheduled to complete in 2010 and has an estimated cost of USD 4 billion.
16
Zawya, Company Websites
January, 2008
GCC Industry Report 24
STEEL
Steel, an alloy of iron and small amounts of carbon, became a mass-produced good
via the Bessemer process in the mid-19th
century. Steel is the fundamental
component required in the creation of buildings, roads, vehicles and the general
infrastructure of a nation. Its characteristics – strong, light, durable, corrosion-
resistant, adaptable and completely recyclable – have made it extremely popular. The
steel industry is a major contributor to the economies of developed and developing
nations. A full-fledged steel industry is one way of gauging the robustness of a
country’s economy.
Exhibit 2.1 displays the global steel production timeline.
0
200
400
600
800
1000
1200
1400
1950 1955 1960 1965 1970 1975 1980 1985 1996 1995 1990 1998 1999 1997 2000 2001 2002 2003 2004 2005 2006
The History of Steel
The development of the steel industry has undergone three distinct phases. The first
phase was during the post-war industrial era when steel was widely used in the
construction of buildings and infrastructure. The second phase was during the
breakup of the USSR when steel production became much higher than consumption.
The third and current phase, which is a boom phase, is one which has seen the
shifting of steel production to developing countries and the control of global steel
supply. The industry has been plagued by oversupply and low margins, however,
things are beginning to change.
Exhibit 2.2 displays the historical phases of steel.
Exhibit 2.1: Global Steel Production (Million tons) 1950 - 2006
Source: IISI, GCG Analysis
Exhibit 2.2: Steel Phases Timeline
Source: IISI, GCG Analysis
Steel is currently in its
boom phase with
production levels
rising each year
1950-1970 1970-2000 2000-2006
High demand for steel in infrastructure projects in
industrialized countries
An oversupply of steel
and low demand
plague the markets
Demand led by
India, China and
other developing countries spurs
growth
Oversupply of steel
has been a problem in
the past years
January, 2008
GCC Industry Report 25
Steel Facts
Steel was first produced via the Bessemer process in the 1850’s. Iron ore is the main
raw material used in the making of steel and 98% of all mined iron ore is used for
this purpose.17
Major producers of iron ore include Australia and the BRIC countries
- Brazil, Russia, India and China. One interesting fact about steel is that it is highly
recyclable. The use of steel scrap in making steel is highly prevalent due to its lower
cost and the fact that steel retains its characteristics during the recycling process.
Steel products include long, flat, semi-finished, finished, hot rolled, cold-rolled etc.
Exhibit 2.3 classifies various kinds of steel products in terms their place along the
value chain.
Steel can be produced using scrap (recycled steel) in an electric arc furnace, using
iron ore, coke (a derivative of coal) and limestone in a blast furnace via the basic
oxygen steelmaking process or using iron ore in the direct reduction process (DRI)
using natural gas.
An ingot is the absolute first shape that molten metal takes on. After this, ingots can
be molded into blooms, billets and slabs. These are collectively referred to as semi
finished shapes or semi finished products. Blooms and billets are used in the
production of long products and slabs are used in the production of flat products.
Long products are bars, rods and steel sections. Flat products are plates, strip or hot-
rolled (HR) coils which are much thinner than plates. Specialty products include
coated steel products and wire.
17
Mineral Information Institute (MII)
Exhibit 2.3: Steel Products Value Chain
Source: Industry Websites, GCG Analysis
Long and flat
products have an
almost infinite
number of uses
Ingots
Semi-Finished Products
Long Products Flat Products Specialty Products
January, 2008
GCC Industry Report 26
Global Production
The Chinese steel industry is the largest in the world. Exhibit 2.4 displays global
steel production and highlights the top four global producers.
423,207
116,22798,539
70,755
China Japan USA Russia
`
China is the top producer and consumer of steel, followed by Japan and the USA.
Exhibit 2.5 displays world steel consumption by region.
China
31%
Other Asia
21%
Europe
20%
NAFTA
15%
MENA
5%
CIS
5%
Other
4%
It is the increase in demand and supply from China that is fuelling the global steel
industry. It remains one of the most important markets in terms of size and potential
for growth.
Exhibit 2.5: Global Steel Consumption Share – 2006
Source: IISI, GCG Analysis
Exhibit 2.4: Top Four Steel Producing Countries 2006 (Million Tons)
Source: IISI, GCG Analysis
China leads the pack
with significantly
higher production
than the others
Asian consumption of
steel accounts for over
50% of total steel
consumption
January, 2008
GCC Industry Report 27
Exhibit 2.6 displays comparable world growth, including China, in steel production
over the last 6 years.
828,297
946,741
1,223,055
2000 2003 2006
CAGR : 7%
Exhibit 2.7 displays the growth in Chinese steel production over the last 6 years.
The two charts above display the relative growth of China’s steel production to the
rest of the world. Indeed the difference is extreme.
Exhibit 2.7: Steel Production Growth China 2000 - 2006
Source: IISI, GCG Analysis
Source: IISI, GCG Analysis
Exhibit 2.6: Steel Production Growth World 2000- 2006
126,317
219,449
423,207
2000 2003 2006
CAGR: 22%
China’s steel
production has shot
up due to domestic
growth
Compared to China,
steel production
growth for the rest of
the world has been
quite low
January, 2008
GCC Industry Report 28
Steel in the GCC
The steel industry is well developed in the GCC and is much more fragmented than,
for example, the aluminum industry, with many players taking a chunk of the overall
production pie. As we will see, all the GCC states have invested in local steel
industries. Considering the current economic boom, infrastructure projects and
construction activity are the main drivers of the demand for manufacturing in the
GCC and steel is the construction material of choice. GCC member states consume
378 kg of steel per person. The corresponding rate at the world level is only 182 kg.18
Currently, demand outstrips supply in the GCC and steel prices have already risen by
25% this year.
Exhibit 2.8 displays the steel imports of GCC countries over three years. It is clear
from the graph that steel imports have gone up and local production is not meeting
demand.
0
1
2
3
4
5
6
UAE KSA Kuwait Qatar Oman Bahrain
2003 2004 2005
Some strategic advantages that GCC states have relative to the rest of the world are:
1) Comparative Advantage – Energy and Natural Gas: Similar to aluminum
smelting, steel processing is an energy intensive process and readily
available low-cost energy resources are plentiful in the GCC. Due to the
availability of natural gas, GCC states can produce steel via the direct
reduction (DRI) process which does not require a heavy capital investment.
2) Labor Advantage – Due to the availability of low-cost labor construction is
literally out of control in the GCC. Steel is extensively used in the
18
Gulf Organization for Industrial Consulting (GOIC), Gulf Industrial Bulletin, Volume
6, Issue 73, August 2006
Exhibit 2.8: GCC Steel Imports (Million tons)
Source: ISSB, GCG Analysis
Steel imports for all
GCC states, except
Kuwait, have been
rising, with the UAE
importing the highest
quantities
January, 2008
GCC Industry Report 29
construction industry and given that a large number of projects are currently
taking place, the demand for steel is definitely here to stay.
Exhibit 2.9 displays the current steel capacity in the region and the capacity once all
future projects are complete.
Reinforcement Bars- Strong Demand
The demand for reinforcement bars, or rebar’s as they are commonly known, is high
in the GCC. More than 3 million tons of rebar’s are traded and consumed each year
and this figure is expected to reach 4 million tons by the end of the year.19
Steel rebar is used in the building of concrete structures in order to provide stability
and durability to the structure and because the two materials have suitable physical
characteristics. As concrete is a brittle material and steel a strong one, steel is usually
embedded into concrete structures to prevent the collapse of the structure.
Furthermore both materials have similar reactions to temperature changes making
them a good fit for each other. Rebar is used in bridges, highways and other concrete
structures.
19 Gulf News, “Dubai’s demand for steel rebar to grow 20% annually”, 2007
GCC Steel Projects
Exhibit 2.9: GCC Annual Steel Production (Million tons)
Source: Zawya, GCG Analysis
GCC steel production
will increase by over
200% in 2012
14.75
2006A
44.9
2012E
UAE
Oman
Saudi Arabia
Bahrain
Qatar
1.9
1.7
5.7
4
0.25
9
6.4
14.6
GCC Total
Current Future
13
1.4
Kuwait
1.7
January, 2008
GCC Industry Report 30
Exhibit 2.10 displays the current scenario of steel projects in the GCC with greater
detail.
Name Yearly Capacity (tons) Completion Date Country
Al Ghurair/Tradeline Steel Complex 400,000 2007 UAE
EIS Complex Expansion 2 million 2008 UAE
ANIE Steel Complex 350,000 2008 UAE
Essar Steel Plant 1 million 2008 UAEESI Musaffah Steel Plant 4.1 million 2008 UAE
Hadeed Expansion Project 3.25 million 2008 KSA
Al Shadeed Iron and Steel Complex 1.5 million 2008 Oman
GIIC Iron Ore Pellet Plant 5 million 2009 Bahrain
Bildco Steel Rolling Mill 300,000 2009 UAEPKIC JEC Steel Plant 1 million 2009 KSA
Al Ittefaq SPC Steel Plant 2 million 2009 KSA
Jubail Seamless Tube Mill 500,000 2009 KSA
Atoun Yanbu Steel Plant 1.5 million 2009 KSA
GIIC Steel Complex 4 million 2010 BahrainSIPC Iron ore Pellet Plant 7.5 million 2010 Oman
Given the advantages that the GCC states have, and the large number of projects in
the pipeline, the steel industry is a profitable business and will continue to be so in
the future.
Exhibit 2.11 displays the number of existing steel companies in the GCC.
25
1
2
2
6
7
7
4%
8%
8%
24%
28%
28%
Qatar Bahrain Oman Kuwait UAE KSA Total
Exhibit 2.10: GCC Steel Project Details
Source: Zawya, GCG Analysis
The UAE and KSA
are initiating over
70% of the Steel
projects in the GCC
Exhibit 2.11: GCC Steel Companies – Regional Breakdown
Currently, major steel
producing companies
are few in the GCC
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 31
United Arab Emirates
Overview
In 2005, the UAE was the fourth largest net importer of steel in the world after the
United States, Thailand and Iran, importing 5.4 million metric tons of steel.20
There
are a multitude of infrastructure projects developing in UAE. The construction of the
tallest building in the world, various residential complexes and the Dubai Metro are
all examples of major projects that involve the use of steel on a massive scale. The
steel demand is expected to grow from over 5 million tons currently to 10 million
tons by 2010.21
Current Infrastructure
The UAE has 4 major steel companies and a number of smaller ones. Exhibit 2.12
displays the current and future capacity of steel in the UAE.
20
International Iron and Steel Institute, Major Importers and Exporters of Steel, 2005 21 Gulf News, “Demand for steel in UAE set to double in three years”, December
2007
Exhibit 2.12: UAE Steel Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
UAE Steel production
will increase by 235%
in 2009
2006A 2009E
1.7
5.7
Current Future
January, 2008
GCC Industry Report 32
Exhibit 2.13 displays the current market share of the existing companies and the
market share once all new projects and expansions are complete.
7%
36%
29%
18%17% 17%
5%5% 5%
15%
45%
Qatar
Steel
FZE
Alam
Steel
ANIE ESI Bildco Al
Ghurair
Essar
2006A
2010E
While all existing companies are expected to lose market share, Emirates Steel
Industries will be the only company to gain market share in the future, due a major
expansion project. All the other steel companies will have a smaller share of the
market as new players enter the industry.
Activities of Existing Companies
Exhibit 2.14 highlights the activity matrix for aluminum companies in the UAE.
Company
Steel Pellets, Ingots Semi- finished Long Flat Misc.
ANIE ���� ����
ESI ����
Qatar Steel FZE ����
Alam Steel ����
BILDCO ����
ADPICO ����
Dubai Drydocks ����
Upstream Downstream Products
Exhibit 2.13: UAE Steel Company Market Share Comparison
Exhibit 2.14: Steel Activity Matrix - UAE
Source: Zawya, GCG Analysis
The UAE has a
healthy and vibrant
steel industry
Long products such as
rebar are in high
demand in the UAE
Source: Company Websites, Zawya, GCG Analysis
January, 2008
GCC Industry Report 33
Major Up and Coming Projects22
1. Emirates Integrated Steel (EIS) Complex Expansion
The project is owned by the General Holding Corporation under the name of
Emirates Iron Industries Company (EIIC) and will be an addition to the Emirates
Steel Industries’ current productions. A capacity of 2 million tpy of wire rod and
rebar will be reached via the addition of 2 new rolling mills, a direct reduction plant
and a steel melt shop.
2. ANIE Musaffah Steel Complex
ANIE is planning the construction of a Direct Reduction Iron (DRI) sponge iron
plant with a capacity of 250,000 tpy and a steel billet manufacturing facility with a
capacity of 350,000 tpy. The cost of the project is USD 300 million and it is
expected to be complete by 2008.
22
Zawya, Company Websites
January, 2008
GCC Industry Report 34
Bahrain
Overview
The Bahrain steel industry is in its developing stage. There is one main company that
is heading all future projects.
Current Infrastructure
Exhibit 2.15 displays the current and future capacity of steel in Bahrain.
The Gulf Industrial Investment Company (GIIC) is the only company that produces
steel and is the only company planning projects in the market. Hence all steel
production market shares will belong to GIIC.
Activities of Existing Companies
Exhibit 2.16 highlights the activity matrix for aluminum companies in Bahrain.
Company
Steel Pellets, Ingots Semi- finished Long Flat Misc.
BRC Weldmesh ����
GIIC ����
Upstream Downstream Products
Exhibit 2.15: Bahrain Steel Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Exhibit 2.16: Steel Activity Matrix - Bahrain
Source: Zawya, GCG Analysis
Steel production in
Bahrain will increase
by 225% in 2010
Bahrain has a limited
number of steel
companies
13
2006A
4Current
Future
2010A
January, 2008
GCC Industry Report 35
Major Up and Coming Projects23
GIIC Projects
The GIIC Iron Ore Pellet Plant and Steel Complex are the second and third largest
projects by capacity in the GCC, respectively. The former facility will increase iron
ore pellet production capacity to 11 million and is expected to be completed by late
2009. The latter facility will include a Direct Reduction Iron (DRI) plant with a
capacity of 1.6 million tpy, a steel melt shop with a capacity of 1.2 million tpy and a
rolling mill with a capacity of 1.1 million tpy. The expected year of completion is
2010 and the total cost of the two projects is over USD 925 million.
23
Zawya, Company Websites
January, 2008
GCC Industry Report 36
Qatar
Overview
With Qatar’s abundant oil and gas resources and revenues stemming from the same,
the local steel industry is thriving. Qatar’s major government owned steel company
QASCO has placed Qatar on the regional and international steel map and has
emerged as one of the biggest players this side of the world. Qatar’s steel industry is
catering to the increasing domestic demand and to the general GCC demand.
Current Infrastructure
Qatar currently has only one steel company with no projects planned in the near
future. Exhibit 2.17 displays the current production of steel in Qatar.
Activity Matrix
Exhibit 2.18 highlights the activity matrix for Qatar Steel.
Company
Steel Pellets, Ingots Semi- finished Long Flat Misc.
Qatar Steel ���� ����
Upstream Downstream Products
Exhibit 2.17: Qatar Steel Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Qatar has only one
major producer of
steel, namely, Qatar
Steel
2006A
1.9Current
Exhibit 2.18 Steel Activity Matrix - Qatar
Source: Zawya, GCG Analysis
Qatar Steel is the only
steel company in
Qatar
January, 2008
GCC Industry Report 37
Oman
Overview
Manufacturing is currently one of the key diversification areas of the economy. As
such Oman’s steel industry is expanding at a healthy rate with two significant
projects in the pipeline.
Current Infrastructure
Oman currently has one company producing rebar. Also, two projects with a
combined capacity of 9 million tpy are on the way. Exhibit 2.19 displays current and
future steel production in Oman.
Activity Matrix
Exhibit 2.20 highlights the activity matrix for steel companies in Oman.
Company
Steel Pellets, Ingots Semi- finished Long Flat Misc.
Sohar Steel ����
Al Jazeera Steel Products Co. ����
Upstream Downstream Products
Exhibit 2.19 Oman Steel Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Oman’s two up and
coming projects will
allow country’s to
establish significant
steel production
capacity by 2010
0.25
9
Current Future
2010E2006A
Exhibit 2.20 Steel Activity Matrix - Oman
Source: Zawya, GCG Analysis
Oman steel companies
specialize in long
products
January, 2008
GCC Industry Report 38
Major Up and Coming Projects24
1. Sohar Industrial Port Company (SIPC) Iron ore Pellet Plant
The SIPC steel project is the largest both by contract value and by capacity size and
will be located in the Sohar Industrial City. An iron ore palletizing plant with a
capacity of 7.5 million tpy will be built. Companhia Vale do Rio Doce (CVRD), the
world’s second largest mining company and the world leader in iron ore and pellets
production and commercialization conducted the feasibility study for this project and
will provide all the iron ore for the plants operations. SIPC is a 50:50 partnership
between the Government of Oman and the Rotterdam Municipal Port Management
of Netherlands.
2. Shadeed Iron and Steel Complex
The project will consist of a 1 million tpy steel melt shop and a 500,000 tpy Direct
Reduction Iron (DRI) plant. The Shadeed Iron & Steel Limited company, a part of
Al Ghaith Holding was established in 2006. The USD 870 million steel project is
still in the process of being set up and will begin primary metal production in 2008.
Annual production will be 1.1 million tpy of steel billets and 400,000 tpy of hot
briquette iron (HBI) which is a feed material in steelmaking. The complex will be
located in the Sohar Industrial City.
24
Zawya, Company Websites
January, 2008
GCC Industry Report 39
Kuwait
Overview
Kuwait has a number of steel products companies but primary production facilities
have not yet been established in the State.
Current Infrastructure
Kuwait has around ten companies supplying steel products in Kuwait but no
upstream producers of steel.25
Exhibit 2.21 displays the current production of downstream steel products in Kuwait.
Exhibit 2.22 displays the current market share of the existing companies.
25
Zawya, GCG Analysis
Exhibit 2.21: Kuwait Steel Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Kuwait steel
production will
increase by over 20%
in 2008
1.66
2006A
1.4
Current
Future
2008E
January, 2008
GCC Industry Report 40
120
150
500
600
1370
11%
36%
44%
9%
KPIOS Kuwait Reinf. Steel Al Oula United Steel Total
Activities of Existing Companies
Exhibit 2.23 highlights the activity matrix for steel companies in Kuwait.
Company
Steel Pellets, Ingots Semi- finished Long Flat Misc.
United Steel ����
Al Oula ����
Kuwait Reinforced Steel ����
KPIOS ����
Qudaibi Steel ����
Hayakel ���� ����
Upstream Downstream Products
Exhibit 2.23: Steel Activity Matrix – Kuwait
Source: Company Websites, Zawya, GCG Analysis
Exhibit 2.22: Kuwait Steel Company Market Share Comparison
Source: Company Websites, Zawya, GCG Analysis
United Steel is the
only manufacturer of
reinforcement bars in
Kuwait
In relation to other
industries Kuwait has
a fairly competitive
steel industry
January, 2008
GCC Industry Report 41
Saudi Arabia
Overview
In 2005, Saudi Arabia was the twelfth largest net importer of steel in the world.26
The Kingdom has the most players in the steel industry compared to the other GCC
states and thus contributes significantly to domestic requirements. In the Kingdom,
iron and steel factories are entitled to benefit from the Public Investment Fund which
finances projects from these industries and further helps growth of the steel industry.
Current Infrastructure
Saudi Arabia has seven major steel companies specializing in a variety of products.
Exhibit 2.24 displays the current and future production of steel in the Kingdom.
Exhibit 2.25 displays the current market share of the existing companies and the
market share once all new projects and expansions are complete.
26
International Iron and Steel Institute, Major Importers and Exporters of Steel, 2005
Exhibit 2.24: Saudi Arabia Steel Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Steel production in
the KSA will increase
by almost 130% in
2009
6.4
14.6
2006A 2009E
Current Future
January, 2008
GCC Industry Report 42
11%
61%
16%
8%7%6%2%
7%4%
49%
20%
3%3%3%1%
APC Attieh
Steel
United
Gulf
Rajhi
Steel
Ittefaq Hadeed Jubail
Mill
PKIC
JEC
Plant
Yanbu
Plant
2006A
2009E
The graph above shows that all existing companies will lose market share over the
next few years except Al Ittefaq Steel Products Company (ISPC). This is due to the
company’s steel project which will significantly boost the capacity of the company
in the future enabling it to gain market share. It is also clear from the graph that
Hadeed currently has the greatest market share and will also have the greatest market
share in the future, albeit lower than its current share.
Activities of Existing Companies
Exhibit 2.26 highlights the activity matrix for steel companies in Saudi Arabia.
Company
Steel Pellets, Ingots Semi- finished Long Flat Misc.
Hadeed ���� ���� ����
Ittefaq Steel ����
Rajhi Steel ���� ����
United Gulf Steel ����
Zamil Steel ����
APC ����
Attieh Steel ����
Upstream Downstream Products
Exhibit 2.25: Steel Company Market Share Comparison - KSA
Source: Company Websites, Zawya, GCG Analysis
Exhibit 2.26: Steel Activity Matrix - KSA
Source: Company Websites, Zawya, GCG Analysis
Hadeed is and will
remain the market
leader in steel
production in the KSA
Long products
represent the bulk of
steel products
January, 2008
GCC Industry Report 43
Major Up and Coming Projects27
1. Al Ittefaq Steel Products Company – Dammam Steel Plant
ISPC-Dammam is planning to build a flat steel products plant in the Dammam
Second Industrial City. The plant costs USD 400 million and will have a capacity of
2 million tpy. The plant is expected to be completed by late 2009.
2. Hadeed Expansion Project
Hadeed is building a 1.75 million tpy DRI plant and increasing its flat products
capacity to 2 million and its long products capacity to 3 million. Total capacity
inreaase will be 3.25 and actual increase in steel production will be 1.22 million tpy.
The cost of the expansion is USD 383 million and is to be completed by early 2008.
27
Zawya, Company Websites
January, 2008
GCC Industry Report 44
CEMENT
Cement, a super-fine gray or white powder, is comprised of four elements – calcium,
silicon, aluminum and iron. Portland cement is the most common type of cement and
was invented by Joseph Aspdin in 1824. It is named after the Isle of Portland, where
the limestone used in its production was quarried. Raw materials involved in the
production of cement can be all or any of the following - limestone, marl, shale, iron
ore, clay, and fly ash. However, the most common ingredients are limestone, clay
and sand. The raw materials are crushed and proportioned in order to produce
cement with specific properties before the production process begins.
Cement production is an energy intensive process with fuel representing 35% of
variable costs.28
A lot of heat is required in the production of cement as temperatures
go as high as 3400 F (one-third of the sun’s surface temperature) in the kiln. The kiln
is the largest moving piece of industrial equipment and the main piece of equipment
used in the production of cement. It is in the kiln that clinker is formed. When raw
materials are heated to extremely high temperatures a chemical reaction takes place
causing the calcium and silicon oxides to fuse into calcium silicates – cement’s key
component. The resulting mass is known as clinker and is gray in color. Once clinker
is cooled, combined with gypsum and made into a powder form it can be called
cement.29
Cement Facts
Clinker is powdered to make cement. The types of cement produced are used to
make concrete with specific properties. The word cement literally means a substance
to make objects adhere to each other. Portland cement is one type of cement; others
include blended and expansive cements. All kinds of cement are hydraulic cements
which means that they harden when mixed with water. Cement is the primary
constituent of concrete. Concrete is a rock-like mass which has a variety of
construction applications - highways, streets, parking lots, parking garages, bridges,
high-rise buildings, dams, homes, floors, sidewalks, driveways, and numerous other
applications.
Exhibit 3.2 displays the physical make-up of concrete.
28
British Cement Association (BCA) 29
Portland Cement Association (PCA)
Exhibit 3.1: The Four Components of Cement
Source: Portland Cement Association, GCG Analysis
20
CaSilvery White
Alkaline Earth Metal
14
SiBlue Grey
Semi Metallic
Element
13
AlSilvery White
Metal
26
FeGrey Metallic Element
Cement plants are
usually located near
limestone quarries
where raw materials
are abundant
January, 2008
GCC Industry Report 45
Aggregate
67%
Water
16%
Cement
11%
Air
6%
Concrete is formed when paste (cement and water) and aggregate (sand and gravel)
are combined. The water content controls many of the characteristics of the resulting
concrete and low water content results in high quality concrete. The most common
type of concrete usage is ready-mixed concrete.
Exhibit 3.3 displays the value chain of cement.
Exhibit 3.2: The Four Components of Concrete
Exhibit 3.3: Cement Products Value Chain
Source: Industry Websites, GCG Analysis
Source: PCA, GCG Analysis
Aggregate containing
sand and gravel forms
the largest component
of concrete
Ready-mix concrete is
handled in trucks with
revolving drums
Cement
Concrete
Precast Ready-mix Masonry
Clinker
January, 2008
GCC Industry Report 46
Global Cement Production
China and India are the world leaders in cement production. Exhibit 3.4 displays
cement production on a global level.
1100
155101
68
China India US Japan
The above graph depicts that China has over 40% share of the world’s cement
production. China is also the world’s top consumer of cement. Chinese cement
consumption accounts for more than 46% of world consumption and 75% of
expected growth in world cement consumption during 2007. According to the report
emerging and developing countries such as those of the GCC are generating the rest
of the global growth.30
30
Portland Cement Association, The Monitor, Flash Report, March 2007
Exhibit 3.4: World Cement Production 2006 in Thousand Metric tons
Source: USGS Mineral Commodity Summaries, GCG Analysis
China is the world
leader in cement
production
January, 2008
GCC Industry Report 47
Cement in the GCC
The construction sector and the cement industry go hand in hand. Construction
activity in all the GCC states is rampant and demand for cement has shot through the
roof in the recent years as have cement prices. The Kingdom of Saudi Arabia and the
UAE are leading the way for the GCC cement industry. Prices have been rising over
the past few years because of the high demand as well as rising fuel and raw material
costs. Coal is being increasingly sought after as a fuel and raw material input.
Capacity expansions are happening region wide and questions of oversupply in the
near future are being addressed. Exhibit 3.5 shows the current and anticipated future
production of cement in the GCC.
GCC Cement Projects
Exhibit 3.6 displays the current scenario of cement projects in the GCC with greater
detail. Most of the capacity increases are arising from the United Arab Emirates and
Saudi Arabia. As mentioned earlier, this is primarily because of the scope of
construction activity and infrastructure developments happening in these regions.
Exhibit 3.5: GCC Annual Cement Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Annual cement
production in the
GCC will increase by
40% in 2012
2006A
2012E
UAE
Oman
Saudi Arabia
Bahrain
Qatar
7.5
17
29
0.5
3.5
5.75
27
42
GCC Total
Current Future
1.2
Kuwait
2.1
2.9
57.6 80.8
January, 2008
GCC Industry Report 48
11
1
5
5
9%
45%
45%
Bahrain UAE KSA Total
Exhibit 3.7 displays the projects with greater detail.
Name Yearly Capacity (tons) Completion Date Country
Emirates Cement Company Fujairah Plant 1.1 million 2007 UAE
Falcon Cement Plant 730,000 2008 Bahrain
Star Cement Ras Al Khaimah Plant 2 million 2008 UAE
Arkan Building Materials Fujairah Plant 3.1 million 2008 UAE
Najran Cement Plant 3.3 million 2008 KSA
NRC - Arar Cement Plant 2.2 million 2008 KSA
Al Watan Jalajil Cement Plant 3.3 million 2009 KSA
ACC Labuna Cement Plant 4 million 2009 KSA
Al Ahsa Cement Plant 1.8 million 2009 KSA
Al Ain Cement Factory 4 million 2010 UAE
Jebel Ali Cement and Clinker Plant 2.4 million 2010 UAE
In addition to having the most number of planned projects, the UAE and Saudi
Arabia also have the highest number of existing cement producers in the GCC.
Exhibit 3.8 compares the number of existing aluminum companies in the different
GCC states.
Exhibit 3.7: GCC Cement Project Details
Source: Zawya, GCG Analysis
Exhibit 3.6: GCC Cement Projects – Regional Breakdown
Source: Zawya, GCG Analysis
The UAE and Saudi
Arabia are planning
an equal number of
projects
Arabian Cement
Company is planning
one of the largest
projects in the GCC
January, 2008
GCC Industry Report 49
29
12
8
3
3
2
1
41%
28%
10%
10%
7%3%
Bahrain Oman Qatar Kuwait KSA UAE Total
Exhibit 3.8: GCC Cement Companies – Regional Breakdown
Source: Zawya, GCG Analysis
The UAE and Saudi
Arabia have the
highest number of
cement companies in
the GCC
January, 2008
GCC Industry Report 50
United Arab Emirates
Overview
The UAE is at the forefront of the cement industry in the GCC. For two years in a
row the international cement conference Cemtech, was held in the UAE and will take
place in the country again in 2008. Aside from being a place where global cement
industry leaders congregate, the UAE, and particularly Dubai is also the leader in
terms of construction activity. A large number of cement and clinker plants in the
UAE are located in the emirate of Ras Al Khaimah due to the availability of raw
materials there. Currently, the price of cement in the UAE is capped at around USD
80 per ton and around 9 cents per kilogram.31
Second Largest Producer
According to the Ministry of Public Works, the UAE is set to become the region’s
second largest producer of cement by 2009 with an annual production of up to 50
million tons34
. However a supply surplus is expected to cause a glut in the UAE
cement market once all capacity expansions are complete. The Kingdom of Saudi
Arabia is currently the region’s top cement producer.
The Ras Al-Khaimah (RAK) Appeal
RAK is the fourth largest emirate in the United Arab Emirates. The emirate has
become an important location for players in the UAE cement industry primarily
because of the abundance of limestone deposits in and around the Hajjar Mountain
area. Four cement factories have set up operations in RAK.
Current Infrastructure
Every emirate in the UAE has a cement factory. The UAE currently has twelve
companies specializing in the production of cement and clinker and twenty-six
companies involved in the downstream activities such as ready-mix and precast
concrete.32
Exhibit 3.9 displays the total current and expected future annual production of
cement in the UAE.
31
Gulf News, “Cement sector likely to suffer from overcapacity”, June 2007 32
Zawya, Company Websites
January, 2008
GCC Industry Report 51
The future capacity increase shown on the above display will result from the
expansion of existing companies and the entrance of new companies in the market.
Exhibit 3.10 displays the change in market share that will result once expansions and
new projects come on stream.
0% 5% 10% 15% 20% 25% 30%
ECC Fujairah Plant
Star Cement RAK
RAK White Cement
Umm Al Qaiwain
Jebel Ali Cement
Ajman Cement
RAK Cement
Binani
Arkan
Fujairah Cement
National Cement
Sharjah Cement
Gulf Cement
Union Cement
2006A
2010E
Source: Company Websites, Zawya, GCG Analysis
Source: Zawya, GCG Analysis
The UAE’s demand
for cement is on the
rise and will increase
by 70% in 2010
Union Cement is the
currently leader in
cement production in
the UAE
Exhibit 3.10: UAE Cement Company Market Share Comparison
2006A 2010E
17
29
Current Future
Exhibit 3.9: UAE Cement Production (Million tons)
January, 2008
GCC Industry Report 52
The above graph shows that as of today Union Cement Company has the maximum
market share in the UAE cement market. However, in the next few years this share
will decrease from 24% to 15%. In 2010, Arkan Building Materials Company will
have the largest share in the cement market – 28%. Arkan, which is owned by the
General Holding Group, will have the following factories under its wing – Emirates
Cement Factory, Al Ain Cement Factory and the Fujairah Cement Plant.
Activities of Existing Companies
The UAE has around twenty-six downstream cement companies specializing in the
production of ready-mixed, precast and masonry cement. Exhibit 3.11 displays the
activity matrix for companies in the UAE. The top 4 cement companies are listed
along with a few downstream players.
Company
Quarrying Cement/Clinker Readymix Precast Masonry Misc.
Union Cement ����
Gulf Cement Co. ����
Sharjah Cement ����
National Cement ����
Contech
Al Meraikhi ����
Arabian Mix ���� ����
Arabtec Precast ����
Upstream Downstream
Major Up and Coming Projects33
1. Al Ain Cement Factory
The factory will be owned by the Emirates Cement Factory which was formerly
known as Al Ain Cement Company. The capacity of the cement plant will be 4
million tpy and it will be located in Al Ain Industrial City. Commissioning for the
plant is expected in 2010. The construction for the plant was awarded to China
National Building Material Equipment Corporation (CBMEC).
2. Emirates Cement Company (ECC) Fujairah Plant
ECC is 50% owned by the Egypt-based Orascom Industries Group (OCI). Along
with the Dubai Investment Group and the Government of Fujairah the company
plants to build a 1.1 million tpy cement plant in Fujairah. The plant was completed in
August 2007.
33
Zawya, Company Websites
Source: Zawya, GCG Analysis
There is a lot of
competition in the
UAE cement market
Exhibit 3.11: Cement Activity Matrix – UAE
January, 2008
GCC Industry Report 53
Bahrain
Overview
Bahrain does not have much activity on the cement industry front. There is just one
company at present and one project in its development due to be completed in early
2008. Bahrain also has three downstream companies.
Current Infrastructure
Bahrain has one cement company and one project underway; these are Arabian Gulf
Cement and Falcon Cement Company respectively. Exhibit 3.12 displays the current
and future production capacity of cement in Bahrain.
Activities of Existing Companies
Bahrain has two downstream cement companies specializing in the production of
ready-mixed, precast and masonry cement. Exhibit 3.13 displays the activity matrix
for companies in Bahrain.
Exhibit 3.12: Bahrain Cement Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Bahrain cement
production will
increase by 140% in
2008
0.5
2006A
1.2
Future
Current
2008E
January, 2008
GCC Industry Report 54
Company
Quarrying Cement/Clinker Readymix Precast Masonry Misc.
Arabian Gulf ����
Haji Hassan Group ���� ����
Delmon ���� ����
Upstream Downstream
Major Up and Coming Projects34
Falcon Cement Plant
Falcon Cement Company which was established at the end of 2008 is setting up the
Falcon Cement Plant which will have a yearly capacity of 730,000 tpy. The plant is
currently under construction and is expected to be operational in early 2008.
34
Zawya, Company Websites
Source: Zawya, GCG Analysis
Exhibit 3.13: Cement Activity Matrix - Bahrain
There are limited
cement companies in
Bahrain
January, 2008
GCC Industry Report 55
Qatar
Overview
Qatar has been involved in a multitude of infrastructure and real estate developments
such as the Pearl Qatar, the New Doha International Airport, the Friendship Bridge,
Mesaieed petrochemical complex, Qatalum Aluminum Smelter project and many
others.
Cement therefore is in high demand and according to Qatar’s Gulf Cement Company
current production needs to be increased by 60% in order to meet daily demand of
20,000 tons of cement.
Current Infrastructure
There are two cement companies in Qatar. Exhibit 3.14 displays the current cement
capacity in Qatar and the capacity once all expansions are complete.
Exhibit 3.15 displays the market share of the two existing companies in
Qatar.
Exhibit 3.14: Qatar Cement Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Qatar does not
currently have
planned cement
projects
2006A
7.5Current
January, 2008
GCC Industry Report 56
Qatar National
Cement Co.
76%
Gulf Cement
24%
Activities of Existing Companies Qatar has three downstream cement companies specializing in the production of
ready-mix, precast and masonry cement. Exhibit 3.16 displays the activity matrix for
companies in Qatar.
Company
Quarrying Cement/Clinker Readymix Precast Masonry Misc.
QNCC ����
GCC ����
Readymix Qatar ����
UPC Qatar ����
Construction Ent. ����
Upstream Downstream
Exhibit 3.15: Qatar Cement Company Market Share Comparison
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
Exhibit 3.16: Cement Activity Matrix – Qatar
The Qatar cement
industry is essentially
an oligopoly
QNCC is the main
producer of cement in
Qatar
January, 2008
GCC Industry Report 57
Oman
Overview
Oman’s cement consumption is not as high as that of other GCC member states.
However, GCC member states serve as excellent export markets and as a result
cement production is picking up in Oman to cater to its neighbors. Also, construction
projects are picking up in the Sultanate. According to the Oman Economic Review,
cement consumption was at 2.7 million tons for 2006 representing a 12.5% increase
over the previous year.
The Gonu Effect
Cyclone Gonu struck Oman on June 7, destroying vast amounts of infrastructure and
ringing up a bill of over USD 4 billion in damages. For the Sultanate’s two cement
suppliers the cyclone resulted in disruption of production and a race to meet the
sudden surge in demand.
Current Infrastructure
There are two cement companies in Oman with a combined capacity of over 3.5
million tons of cement per year. Exhibit 3.17 displays the current and future
production of cement in Oman.
Exhibit 3.17: Oman Cement Production (Million tons)
Source: MEED, Zawya, GCG Analysis
Oman cement
production will
increase by 64% in
2008 3.5
5.75
Current Future
2008E2006A
January, 2008
GCC Industry Report 58
Exhibit 3.18 displays the market share of Oman’s two cement producing companies.
46%
54%
48%
52%
Oman Cement Company Raysut Cement Company
2006A 2008E
Activities of Existing Companies
Oman has three downstream cement companies specializing in the production of
ready-mix, precast and masonry cement. Exhibit 3.19 displays the activity matrix for
companies in Oman.
Company
Quarrying Cement/Clinker Readymix Precast Masonry Misc.
OCC ����
RCC ����
Readymix Muscat ����
National Cement ����
Cement Gypsum ����
Upstream Downstream
Exhibit 3.18: Cement Company Market Share Comparison – Oman
Source: Company Websites, Zawya, GCG Analysis
Source: Zawya, GCG Analysis
Raysut Cement will
have the higher
market share in the
future
OCC and RCC are the
market leaders in
Oman and have a
similar market share
Exhibit 3.19: Cement Activity Matrix – Oman
January, 2008
GCC Industry Report 59
Kuwait
Overview
Kuwait has one cement producing company, namely, the Kuwait Cement Company
(KCC). There are two other major players in the cement industry and are pure
traders. There is a short supply of cement in the Kuwait market and raw materials are
not readily available.
Current Infrastructure
There are three upstream companies in Kuwait and five downstream companies.
Exhibit 3.20 displays the current and future production of cement in Kuwait.
Activities of Existing Companies
The UAE has around four downstream cement companies specializing in the
production of ready-mix, precast and masonry cement. Exhibit 3.21 displays the
activity matrix for companies in Kuwait.
Company
Quarrying Cement/Clinker Readymix Precast Masonry Misc.
KCC ����
KPCC ����
Hilal Cement ����
Gulf Readymix ����
Kuwait British Readymix ����
ACICO ����
Al Maseelah ����
Upstream Downstream
Exhibit 3.20: Kuwait Cement Production (Million tons)
Source: MEED, Zawya, GCG Analysis
Source: Zawya, GCG Analysis
Exhibit 3.21: Cement Activity Matrix – Kuwait
Kuwait cement
production will
increase over the next
few years although
not significantly
Kuwait cement
companies produce a
large variety of
cement products
2.9
2006A
Current Future
2.1
2009E
January, 2008
GCC Industry Report 60
Saudi Arabia
Overview
The Kingdom is endowed with the raw materials necessary for cement production.
According to the Saudi Geological Survey, the Kingdom has significant reserves of
cement-grade limestone deposits. The deposits are particularly abundant in the
central region of the Kingdom and also along the Red Sea coastline and Jizan area.
Aside from the abundance of raw materials, there is a great deal of activity
happening on the real estate and construction front in Saudi Arabia creating an
enormous market for cement consumption. The Saudi Arabian General Investment
Authority or SAGIA intends to establish six economic cities throughout the
Kingdom through its Economic Cities initiative. The largest of these and the
initiative’s flagship is the USD 26 billion King Abdullah Economic City to be built
in the north of Jeddah.
Similar to the scenario in the UAE, the demand for cement in the KSA exceeds the
supply and thus cement prices are rising. Once all planned capacity expansions are
completed it is expected that cement prices will fall and there will be a supply
overhang of cement in the Saudi Arabian market.
Current Infrastructure
There are eight players in the Saudi Arabia cement market and combined production
of cement for 2006 was around 27 million tons.35
There also seventeen downstream
producers and five projects in the pipeline.
Exhibit 3.22 displays the current and future production of cement in the GCC.
35
Company Websites
Exhibit 3.22: Saudi Arabia Cement Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Saudi Arabia’s
cement producing
capacity will increase
by 55% over the next
few years
27
42
2006A 2009A
Current Future
January, 2008
GCC Industry Report 61
New projects and expansions are expected to continue accumulating over the next
few years and it is expected that capacity will more than double over the next few
years. Exhibit 3.23 displays the market share of the existing cement producers in the
Kingdom.
10%
8%
8%
5%
4%
12%
11%
9%
8%
8%
7%
5%
18%
17%
14%
13%
12%
11%
8%
6%4%
Labuna Cement Plant
Najran Cement Plant
Al Watan Jalajil Cement Plant
NRC - Arar Cement Plant
Al Ahsa Cement Plant
Saudi Cement
Southern Province Cement
Yamama Cement
Yanbu Cement
Eastern Province Cement
Arabian Cement
Qassim Cement
Tabuk Cement
2006A
2009E
The above graph shows that the cement industry in Saudi Arabia is a very
fragmented one. Although Saudi Cement has the highest market share, the others are
not far behind. With more projects coming up, the industry will continue to be
increasingly fragmented. Saudi Cement’s market share will decrease from 17% to
11% over the next few years. Of the future projects Labuna Cement Plant will have
the greatest market share.
Since the Kingdom is so large, cement companies cater to specific geographical
markets within the Kingdom.
Exhibit 3.24 displays the location of current producers and the expected location of
future producers.
Exhibit 3.23: KSA Cement Company Market Share Comparison
Source: Company Websites, Zawya, GCG Analysis
Saudi Arabia is the
largest cement
producer in the
GCC
January, 2008
GCC Industry Report 62
The Western region of the Kingdom is bursting with activity such as the King
Abdullah Economic City and various residential projects in the holy cities of Mecca
and Medina so the demand in there should be quite robust.
Activity Matrix
The KSA has a number of downstream cement companies specializing in the
production of ready-mixed, precast and masonry cement. Exhibit 3.25 displays the
activity matrix for companies in the UAE. The top four cement companies are listed
along with a few downstream players.
Company
Quarrying Cement/Clinker Readymix Precast Masonry Misc.
Saudi Cement ����
Southern Province ����
Yamama Cement ����
Yanbu Cement ����
Saudi Readymix ����
Al Rashid Abetong ���� ����
Ranco ����
Al Khafrah ����
Upstream Downstream
Exhibit 3.24: KSA Company Market Share and Production – Million TPY
Source: Company Websites, GCG Analysis
N
E
S
W Central
Qassim Cement Company
Yamama Cement Company
Al Watan Cement Company - Jalajil Plant
Current
Future
Saudi Cement Company
Eastern Province Cement Company
Southern Province Cement Company
Najran Cement Plant
Arabian Cement Company
Yanbu Cement Company
Arabian Cement Company- Labuna Plant
Tabuk Cement Company
Arar Cement Plant
Jalajil Cement Plant
Source: Zawya, GCG Analysis
The Western, Central
and Northern regions
of Saudi Arabia are
the most concentrated
with cement producers
There are plenty of
upstream cement
producers in the
Kingdom
Exhibit 3.25: Cement Activity Matrix – KSA
January, 2008
GCC Industry Report 63
Major Up and Coming Projects36
1. Labuna Cement Factory
Arabian Cement Company is establishing a 4 million tpy cement plant in the western
region of the Kingdom. The expected year of completion is 2009. Italy’s Italcimenti
is currently conducting a feasibility study on the project.
2. Najran Cement Plant
The project will be undertaken by the Najran Cement Company (NCC). The cement
plant will have a capacity of around 3.3 million tpy and will be located in the
southwest region of the Kingdom. It is expected to be completed by 2008.
36
Zawya, Company Websites
January, 2008
GCC Industry Report 64
CHEMICALS AND PLASTICS
Chemicals are the integral components used in a variety of industrial applications
and a number of end-user goods.
Chemicals can be categorized under the following broad categories:
The chief sources of energy used in the production of chemicals are oil and natural
gas. These resources not only enable the operations of the chemical industry but are
also used as feedstocks or raw materials in the production process.
Chemicals produced in large quantities are known as commodity chemicals.
Common examples of these are ethylene, ammonia and chlorine. The production of
these chemicals entails low profit margins as they are produced in bulk, have high
energy requirements and are sold at low prices. On the other hand, chemicals
categorized as fine & specialty chemicals generate higher profit margins in relation
to commodity chemicals as they are produced in smaller quantities and are highly
priced. Fine and specialty chemicals include plastics additives, resins, water, paper
and oil treatments, pigments and dyes, oleochemicals and surfactants, active
pharmaceutical ingredients and agrochemicals.37
Petrochemicals
Petrochemicals are essentially chemicals that are produced from petroleum. Naphtha
is the primary source from which petrochemicals are derived making it the single
most important raw material in the petrochemical industry. The two main classes of
petrochemicals are aromatics (derived from crude oil) and olefins (derived from
37
Cefic: European Chemical Industry Council
• Basic Organics
• Basic Inorganics
• Resins and Plastic Materials
• Man-made Organic Fibers
• Fertilizers Pesticides
• Other Agricultural chemicals
• Pharmaceutical and medicine
• Paints, Inks and Coatings
• Sanitation preparations
• Explosives and miscellaneous
Source: NAICS, Industry Websites, GCG Analysis
Chemical products
have uses in a wide
variety of industrial
applications
Exhibit 4.1: Chemical Industry Categories
January, 2008
GCC Industry Report 65
natural gas. Examples of aromatics are benzene, toulene and xylenes and examples
of olefins are ethylene, propylene and butylenes.
Plastics
The plastics industry and the chemical industry go together. Plastics, such as
ethylene and propylene, are a downstream product of certain chemicals. Hence, a
number of chemicals producers also produce plastic materials. Plastic materials can
be of two types: thermosetting polymers and thermoplastics. A thermoplastic is a
very soft plastic that can be melted when exposed to high temperatures and frozen
when cooled. A thermosetting plastic is stronger than a thermoplastic and cannot be
recycled as it is non malleable once formed. Because of their strength, such plastics
are best used in construction and automotive industries.
Chemicals and Plastics in the GCC
In the GCC, petrochemicals define the chemical industry and constitute the bulk of
all chemical capacity. Exhibit 4.2 displays the current chemical production capacity
in the region and the capacity once all future projects are complete.
Exhibit 4.2: GCC Annual Chemicals and Plastics Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
GCC chemicals and
plastics capacity will
increase by 80% in
2012 with almost
50% of the increase
coming from Saudi
Arabia
62 mn
2006A
111 mn
2012E
UAE
Oman
Saudi Arabia
Bahrain
Qatar
9.6
17.5
4.7
10.4
1.5
3.3
8.5
40
64
GCC Total
Current Future
4.2
2.8
6.1
Kuwait
January, 2008
GCC Industry Report 66
Exhibit 4.3 displays the top chemical industry products in the GCC.
21%
18%
17%
15%
10%
6%
4%
3%
3%
2%
Urea
Ethylene
Ammonia
Methanol
Polyethylene
Ethylene Glycol
BTX
Polypropylene
Propylene
Styrene
The graph above shows that urea, ethylene and ammonia comprise the top three
products of the chemical industry in the GCC. Ammonia is produced from methane
which is a principal constituent of natural gas. Urea is used extensively as a fertilizer
and is produced from ammonia. Ethylene or ethene is an olefin (unsaturated
chemical compound) derived from natural gas (ethane) and it is used in the
production of plastics, rubber and dyes. Ethylene is produced via steam cracking of
ethane which means that a saturated hydrocarbon is ‘cracked’ to derive a less
saturated product. More than 50% of global demand for ethylene stems from its role
in the production of polyethylene.38
Shift of Production Assets
Due to the availability of low cost feedstocks in MENA, the rest of the world and
western companies in particular are migrating assets to the region. Through joint
ventures, international companies have established a base in the GCC for the low
cost production of chemicals. For example, Dow Chemical Company is acting as a
foreign partner in the Ras Tanura Integrated Refinery and Petrochemicals Project,
the highest budget project in the GCC, led by the Saudi Arabian Oil Company
(Aramco).
Exhibit 4.4 displays the shift of chemicals production from Western Europe, the U.S.
and Japan to Asia and the Middle East.
38
Shell Chemicals
Source: Zawya, GCG Analysis
GCC ethylene
production represents
a significant chunk of
total global
production
Exhibit 4.3: Relative Percentage of Chemical Industry Products in the GCC
January, 2008
GCC Industry Report 67
According to the above figure, the Middle East currently contributes 4% to world
production and by 2015 it is expected to contribute 10% to world production.
The chemical industry in the GCC has been focused on the production of
petrochemicals and this trend is continuing into the present, with over a hundred
planned petrochemical projects in the GCC. Saudi Arabia is leading the pack with a
share of over 60% from all future planned projects. The bulk of the projects, about
87%, coming on stream are olefins and aromatics production projects.
Exhibit 4.5 displays the share of each GCC state in the number of upcoming
petrochemicals projects.
114
72
8
6
3
13
12
63%
7%
3%5%
11%
11%
Bahrain Kuwait Oman UAE Qatar Saudi Arabia Total
Saudi Arabia has the largest share of petrochemicals projects. Some of the major
projects coming up in the Kingdom are the Saudi Kayan Petrochemicals Complex
and the SABIC – Yansab Olefins Complex.
Source: Zawya, GCG Analysis
Exhibit 4.5: GCC Petrochemicals Projects – Regional Breakdown
Saudi Arabia is the
GCC leader in total
number of
petrochemical
projects
Exhibit 4.4: Chemicals Production Shift 2005 vs. 2015
Source: Aker Kvaerner, GCG Analysis
Western
Europe
29%
U.S.
26%
Japan
10%
Asia
9%
Middle East
4%
Eastern
Europe
6%
China
5.5%
Latin
America
5.5%
Others
5%
Western
Europe
20%
U.S.
18%
Asia
15%
China
13%
Middle East
10%
Latin
America
8%
Eastern
Europe
8%
Japan
7%
Others
1%
The Middle East
and the GCC in
particular will play
an increasingly
important role in
the production of
chemicals in the
future
January, 2008
GCC Industry Report 68
Exhibit 4.6 displays the details for the top 10 projects in the GCC.
Name Yearly Capacity (mn tons) Completion Date Country
SABIC - Yansab Olefins Complex 4 2008 KSA
Equate - Olefins II 2.2 2008 Kuwait
Sohar Aromatics Complex 1 2008 Oman
Saudi Kayan Petrochemical Complex 4 2009 KSA
Fertil - Expansion of Urea Plant 1.04 2009 UAE
Borouge 2 3.1 2010 UAE
Saudi Maaden - Phosphate and Fertilizer Complex 3 2010 KSA
Mesaieed Petrochemical Complex 2.4 2010 Qatar
GPIC - Methanol Plant 1.75 2010 Bahrain
QP/ExxonMobil Petrochemical Complex 2.99 2012 Qatar
Exhibit 4.7 displays the number of chemical companies in each of the GCC states.
66
12
2
9
10
20
22
33%
30%
15%
14%
2%
3%3%
Bahrain Qatar Region-
wide
Kuwait Oman UAE Saudi
Arabia
Total
Chemical companies produce a wide variety of chemicals that are not
petrochemicals. Saudi Arabia has the highest number of chemical companies among
the GCC states and the UAE has the second largest number followed by Oman.
Exhibit 4.8 displays the number of petrochemical companies in each of the GCC
states.
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
Exhibit 4.6: Top 10 GCC Chemicals Projects
The UAE and Saudi
Arabia have the
highest number of
chemical companies
among GCC member
states
All GCC states have
at least one project
that falls in the top
10
Exhibit 4.7: GCC Chemical Companies Comparison
January, 2008
GCC Industry Report 69
107
33
6
11
16
22
46
3%3%
6% 10%
15%
21%
43%
Bahrain Region-
wide
UAE Kuwait Qatar Oman Saudi
Arabia
Total
While there are 66 chemical companies, there are over a 100 petrochemical
companies in the GCC. Again, Saudi Arabia is the market leader and has the highest
number of petrochemical producers in the GCC. Oman and Qatar lead the pack after
Saudi Arabia. Although the UAE has 30% of the total number of chemical
companies, it only has 6% of the total number of petrochemical companies in the
GCC.
Source: Zawya, GCG Analysis
Saudi Arabia, with its
extensive oil reserves,
has the highest
number of
petrochemical
companies in the GCC
Exhibit 4.8: GCC Petrochemical Companies Comparison
January, 2008
GCC Industry Report 70
United Arab Emirates
Overview
The UAE has 20 chemical companies and six petrochemical companies. It has 9
olefins and aromatics projects, 2 fertilizer production projects and one refinery
project planned. However, some of these projects are currently on hold or still in the
planning phase. Some of the largest projects are being set up in the Emirate of Abu
Dhabi where 88% of the total value of the annual production of processing industries
comes from chemicals and plastics.39
Exhibit 4.9 displays the projects that are currently underway in the UAE.
Name Yearly Capacity (tons) Completion Date
Fertil - Expansion of Urea Plant 1.04 million 2009
Hamriyah Ammonia and Urea Plant 803,000 2009
Ruwais Melamine Plant 80,000 2009
Borouge 2 3.1 million 2010
Fertil - Ruwais Fertilizer Expansion 129,027 2010
Takreer - Ruwais GAE 600,000 On Hold
Of these projects, Borouge 2, headed by the Abu Dhabi Polymers Company
(Borouge), has the highest capacity. Borouge will also take over the Ruwais
Melamine project. The next two projects with the highest capacities are fertilizer
projects. The Borouge 2 project will comprise of a polyethylene unit and two
polypropylene units.
Current Infrastructure
Current production by chemicals companies stands at 71,000 tpy and production by
petrochemicals companies 23.6 million tpy.
Exhibit 4.10 displays the current and future production of chemicals in the UAE.
39
Gulf News, “Annual output of Abu Dhabi firms reaches Dh91b”, December 2007
Exhibit 4.9: UAE Chemical Projects
Source: Zawya, GCG Analysis
The Borouge 2
plastics project in Abu
Dhabi is the largest of
all planned projects in
terms of final capacity
January, 2008
GCC Industry Report 71
Exhibit 4.11 displays the current share of existing companies and the future share
which will result after all planned projects and expansions are complete.
13%
35%
60%
32%
23%
22%
8%
2006A 2010E
Borouge Takreer Fertil Hamriyah Ammonia and Urea Plant
Exhibit 4.10: UAE Chemicals Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Exhibit 4.11: UAE Chemical Company Market Share Comparison
Source: Company Websites, Zawya, GCG Analysis
The UAE’s chemicals
production capacity
will increase by over
100% in 4 years
In the coming years
Borouge will be the
market leader
2006A 2010E
4.7
10.4
Current Future
January, 2008
GCC Industry Report 72
Activities of Existing Companies
Exhibit 4.12 displays a matrix of activities.
Company
Oil Refining Petrochemicals Gases Plastics Fertilizers Explosives Other
Borouge ����
Takreer ���� ����
Fertil ����
Petrochem ����
Al Gurg Fosroc ����
Arabex ����
Upstream Downstream
Major Up and Coming Projects40
Borouge Projects
1. Borouge 2
The expansion is currently under construction and is scheduled for completion in
2010. The expansion will increase ethylene production from a current 600,000 tpa to
2 million tpa. The project will consist of an ethylene cracker package, a polyolefins
package, an olefins conversion unit and an offsites and utilities package.
2. The Ruwais Melamine Plant
Borouge took over the project from Fertil in April 2007. The plant is expected to be
completed in 2010.
3. Planned Projects
Borouge 3 petrochemicals complex is in its planning phase and will produce
polyolefin plastics by 2013. The Borouge – Base Chemicals complex is undergoing a
feasibility study.
40
Zawya, Company Websites
Source: Zawya, GCG Analysis
Exhibit 4.12: Chemicals Activity Matrix - UAE
Plastics, fertilizers
and a variety of
chemicals are
currently being
produced in the UAE
January, 2008
GCC Industry Report 73
Bahrain
Overview
Bahrain has one chemical producing company and one petrochemical producing
company. Bahrain also has three petrochemicals projects underway. Exhibit 4.13
displays the projects that are currently planned in Bahrain.
Name Yearly Capacity (tons) Completion Date
GPIC - Ammonia & Urea Plant n/a 2010
GPIC - Methanol Plant 1.75 million 2010
KFH - Power, Water, Petrcochem 982,000 2010
Two of the projects are expansion projects while one is an integrated power, water
and petrochemicals project.
Current Infrastructure
There is only one company with significant production in Bahrain and that is the
Gulf Petroleum Industries Company (GPIC). Exhibit 4.14 displays the total current
and future annual production of chemicals in Bahrain.
Exhibit 4.13: Bahrain Chemical Projects
Source: Zawya, GCG Analysis
Source: Company Websites, Zawya, GCG Analysis
GPIC is the main
petrochemicals
company in the
Kingdom of Bahrain
Bahrain’s chemical
production capacity
will increase by 180%
in 4 years
Exhibit 4.14: Bahrain Chemicals Production (Million tons)
4.2
2006A
1.5Current
Future
2010E
January, 2008
GCC Industry Report 74
The majority of the added future capacity will be in fertilizer products and will result
from GPIC’s two planned projects.
Activities of Existing Companies
Exhibit 4.15 displays a matrix of activities.
Company
Oil Refining Petrochemicals Gases Plastics Fertilizers Explosives Other
GPIC ���� ����
Upstream Downstream
Major Up and Coming Projects41
1. GPIC Petrochemical Complex
GPIC’s petrochemical complex will consist of a menthol plant and a urea and
ammonia plant. The menthol plant will have a capacity of 1.75 million tpy. The
complex is scheduled for completion in 2010 and is currently in the planning phase.
41
Zawya, Company Websites
Source: Zawya, GCG Analysis
Exhibit 4.15: Chemicals Activity Matrix - Bahrain
GPIC currently only
specializes in
downstream products
January, 2008
GCC Industry Report 75
Qatar
Overview
As mentioned in the earlier sections of this report, the State of Qatar has the world’s
third-largest gas reserves. Given this fact, Qatar has 18 petrochemical, chemical and
related companies. In terms of projects, the State has the second highest share of all
plant projects in the GCC.
Exhibit 4.16 displays the projects planned in the State of Qatar.
Name Yearly Capacity (tons) Completion Date
Ras Laffan Olefins Cracker (RLOC) 1.3 million 2008
Q-Chem II 695,000 2008
Qafac II - Expansion 2.5 million 2009
Qafco Melamine Plant 60,000 2009
Qafco V 2.2 million 2010
Mesaieed Petrochemical Complex 2.4 million 2010
Qapco 250,000 2010
Tasnee 30,000 2010
QP/Shell Olefins Complex 1.2 million 2011
QP/ExxonMobil Petrochemical Complex 2.99 million 2012
The table above shows that there are 11 projects in Qatar. Many of the projects will
also be producing plastics: Q-Chem II, Mesaieed Petrochemical Complex, Qapco
and QP/ExxonMobil Petrochemical Complex will all be producing various kinds of
plastics. The largest of the projects will be the QP/ExxonMobile Ras Laffan and it
will also take the longest time to complete.
Current Infrastructure
Exhibit 4.17 displays the total current and future annual production of chemicals in
Qatar.
Source: Zawya, GCG Analysis
Exhibit 4.16: Qatar Chemical Projects
Qatar has plenty of
high capacity
petrochemicals
projects coming on
stream
January, 2008
GCC Industry Report 76
Exhibit 4.18 displays change in market share of existing companies which will result
after all planned projects and expansions are complete.
40%
23%
10%
50%
15%
10%
14%
7%
17%
7%
QP/ExxonMobile
Complex
RLOC
QP/Shell Complex
Mesaieed Complex
QAFCO
QAFAC
Q-Chem
2006A
2012E
Qatar Fertilizer Company (QAFCO) currently has the highest market share (50%) in
Qatar. The company has two planned projects – Qafco V and Qafco Melamine plant,
yet the company will lose market share in the coming years due to other larger
Exhibit 4.17: Qatar Chemicals Production (Million tons)
Source: Company Websites, Zawya, GCG Analysis
Source: Company Websites, Zawya, GCG Analysis
Qatar Chemicals
production will
increase by 82% in
2012
Government owned
holding company
Industries Qatar owns
both QAFAC and
QAFCO
2006A
9.6
Current
Future
17.5
2012E
Exhibit 4.18: Qatar Chemical Company Market Share Comparison
January, 2008
GCC Industry Report 77
projects. Amongst all the existing players only Qatar Fuel Additives Company
(QAFAC) will gain market share in the future due to the Qafac II Expansion project.
With respect to the future projects, the QP/ExxonMobil Complex is expected to have
the highest market share followed by the Mesaieed Complex. Both complexes will
consist of high capacity plastic producing units.
Activities of Existing Companies
Exhibit 4.19 displays a matrix of activities.
Company
Oil Refining Petrochemicals Gases Plastics Fertilizers Explosives Other
QAFCO ����
QAFAC ����
QAPCO ���� ���� ����
QP ���� ���� ���� ���� ����
Upstream Downstream
Major Up and Coming Projects42
1. QAFCO V
QAFCO currently produces 2 million tpy of ammonia and 3 million tpy of urea. As a
result of the new project total ammonia production will reach 3.8 million tpy and
total urea production will reach 4.3 million tpy. Construction of the project will
begin in 2008 and completion is expected in 2011.
2. QAFCO Melamine Company (QMC)
The project is a joint venture between QAFCO and Qatar Intermediate Industries
Holding Company (QH). The QMC plant will produce 60,000 tpy of melamine and
will use QAFCO urea as a feedstock in the production process. QMC will be the
largest melamine plant in the Middle East and the second-largest in the world. The
plant is expected to start production at the beginning of 2009.
3. Ras Laffan Petrochemical Complex
This is a project of Qatar Petroleum (QP) and ExxonMobil Chemical Company. The
former has a 51% share and the later has a 49% share. The project will consist of:
• A 1.3 million tpy ethane/propane cracker
• A 570,000 tpy linear low density polyethylene (LLDPE) unit
• A 420,000 tpy linear density polyethylene (LDPE) unit
• A 700,000 tpy ethylene glycol (EG) unit
The ethylene cracker will be a major source of feedstock for the Qatofin and Q-
Chem II projects. The project is expected to start production in 2012.
42
Zawya, Company Websites
Exhibit 4.19: Chemicals Activity Matrix - Qatar
Source: Zawya, GCG Analysis
Chemical companies
in Qatar produce a
variety of chemicals
and chemical products
January, 2008
GCC Industry Report 78
4. Qatofin Polyethylene Plant
Qatofin, a project of the Qatar Petrochemical Company (QAPCO) and Total of
France, will produce 450,000 tpy of linear low density polyethylene (LLDPE). This
will increase total capacity from 360,000 to 800,000 tpy. The project is expected to
start production at the end of 2008.
5. Q-Chem II
The Q-Chem II project is an expansion of the current Q-Chem infrastructure. The
facility will consist of a high-density polyethylene (HDPE) and alpha olefins plant
with capacities of 350,000 tpy and 345,000 tpy respectively. Total HDPE production
will increase from 450,000 tpy to 800,000 tpy as a result of the expansion. The
project is expected to start production at the end of 2008.
6. Qatar Petrochemicals Complex (QPCC)
QPCC is a joint venture between Qatar Holding Intermediate Industries Company
and Honam Petrochemical Company of South Korea. The complex will produce:
• 180,000 tpy of propylene
• 700,000 tpy of polypropylene
• 380,000 tpy of styrene
• 220,000 tpy of polystyrene
• Over 250,000 tpy of aromatics (xylenes)
The project is expected to start production in 2010.
January, 2008
GCC Industry Report 79
Oman
Overview
Oman has 1 fertilizer company, 10 chemical companies and 22 chemical and
petrochemical companies, the second most in the GCC after Saudi Arabia. Exhibit
4.20 displays the future projects in Oman.
Name Yearly Capacity (tons) Completion Date
SIUCI - Urea and Ammonia Project 2 million 2007
Sohar Aromatics Complex 1 million 2008
Octal Plastics Plant 300,000 2008
Salalah Methanol Plant 1.1 million 2010
OMC - Sohar Menthol Plant 1.1 million n/a
OPIC Sohar Olefins Complex 1 million n/a
A few planned projects are on hold due to rising costs while others are on schedule.
For example the Oman Industries Petrochemical Company (OPIC) project is on hold
due to increased costs.
Current Infrastructure
Exhibit 4.21 displays the current and future production of chemicals in Oman.
Exhibit 4.21: Oman Chemicals Production (Million tons)
Source: MEED, Zawya, GCG Analysis
Exhibit 4.20: Oman Chemicals Projects
Source: Zawya, GCG Analysis
Oman is establishing
its footprint in the
chemicals and plastics
industry
By 2010, Oman’s
chemical production
will increase by
almost 160% 3.3
8.5
Current Future
2010E2006A
January, 2008
GCC Industry Report 80
Exhibit 4.22 displays the current share of existing companies and the future share
which will result after all planned projects and expansions are complete.
34%
4%
1%
87%
10%
2%
13%
13%
24%
12%
SIUCI Project
Salalah Methanol Plant
OMC Plant
Sohar Aromatics
Complex
Oman India Fertilizer
Company
Oman Propylene
Oman Chlorine
2006A
2010E
Activities of Existing Companies
Exhibit 4.23 displays a matrix of activities.
Company
Oil Refining Petrochemicals Gases Plastics Fertilizers Explosives Other
Oman Chlorine ����
OMIFCO ����
Upstream Downstream
Major Up and Coming Projects
43
1. Sohar Aromatics Complex
The complex is a joint venture between the Oman Oil Company (OOC), Oman
Refinery Company and LG International Corporation of South Korea. The complex
will consist of:
• A 790,000 tpy paraxylene unit
• A 210,000 tpy benzene plant
43
Zawya, Company Websites
Exhibit 4.22: Oman Chemical Company Market Share Comparison
Source: Company Websites, Zawya, GCG Analysis
Exhibit 4.23: Chemicals Activity Matrix – Oman
Source: Zawya, GCG Analysis
OMIFCO, part of the
Oman Oil Company,
currently has the
highest market share
OMIFO is the market
leader in Qatar
January, 2008
GCC Industry Report 81
The project is expected to start production in 2010.
2. Salalah Menthol Plant
The plant is a project of the OOC and will produce 1.1 million tpy of menthol. The
plant will also have a power plant, water desalination units, a water treatment plant
and export facilities. The project is expected to start production in 2010.
3. SIUCI – Urea and Ammonia Project
Sohar International Urea and Chemical Industries (SIUCI) is constructing a fertilizer
complex which will produce 730,000 tpy of Urea and 1.3 million tpy of ammonia.
The project is expected to start production in 2008.
4. Octal - Integrated PET Resin and APET Plant Expansion
Octal Holding is constructing a plastics complex which will produce 300,000 tpy of
APET bring total capacity of APET to 330,000 tpy. The project is expected to start
production in 2008.
January, 2008
GCC Industry Report 82
Kuwait
Overview
Compared to other industries, Kuwait has a relatively healthy chemical sector due to
abundant oil reserves. The nature of the chemical industry in Kuwait is that there are
a few parent companies with a number of subsidiaries and all the parent companies
own a share in the other parent companies and/or their subsidiaries. The major
companies are Petrochemical Industries Company (PIC) which is the sixth largest
petrochemical company in the GCC in terms of current owned capacity, Boubyan
Petrochemical Company (BPC) and Qurain Petrochemicals Industry Company which
rank as 16th
and 18th
respectively.44
There are 9 chemical companies and 11 refining and petrochemical companies in
Kuwait. Kuwait’s share in the GCC’s chemical projects is quite low (5%), however it
has 2 major petrochemical projects on the way which will more than double current
capacity. Exhibit 4.24 displays the two major projects coming up in Kuwait.
Name Yearly Capacity (mn tons) Completion Date
Equate - Olefins II 2.2 2008
Shuaiba Aromatics 1.1 2009
The Equate Olefins II project is considered the sister company of EQUATE
Petrochemical Company. The Dow Chemical Company and Petrochemical Industries
Company own 85% of the shares while Boubyan Petrochemical Company and
Qurain Petrochemical Industries Company own the remaining shares.
44
Zawya, Industry Insight Petrochemicals, 2006
Exhibit 4.24: Kuwait Chemicals Projects
Source: Zawya, GCG Analysis
EQUATE is planning
the largest project in
Kuwait
January, 2008
GCC Industry Report 83
Current Infrastructure
Exhibit 4.25 displays the current and future production of chemicals in Kuwait.
Exhibit 4.26 displays the current share of existing companies and the future share
which will result after all planned projects and expansions are complete.
13%
6%
2%
1%
29%
12%
5%
3%
18%
59%
51%
Shuaiba Aromatics
EQUATE
PIC
PCI
BPC
QPIC
2006A
2009E
Source: Company Websites, Zawya, GCG Analysis
Exhibit 4.25: Kuwait Chemicals Production (Million tons)
Source: Zawya, GCG Analysis
By 2009, Kuwait’s
chemical production
will increase by more
than 100%
EQUATE is by far the
market leader in the
production of
chemicals in Kuwait
Exhibit 4.26: Kuwait Chemical Company Market Share Comparison
6.1
2006A
2.8
Current
Future
2009E
January, 2008
GCC Industry Report 84
Although BPC, PIC and QPIC market share will decrease in the future, they all own
shares in EQUATE which is the main chemical producer now and will continue to be
so in the future. Dow Chemicals also owns shares in EQUATE and its related
projects.
Activities of Existing Companies
Exhibit 4.27 displays a matrix of activities.
Company
Oil Refining Petrochemicals Gases Plastics Fertilizers Explosives Other
EQUATE ���� ����
PIC ���� ���� ����
Upstream Downstream
Major Up and Coming Projects45
EQUATE Olefins II
The Olefins II project will produce the following:
• 850,000 tpy ethylene
• 225,000 tpy polyethylene
• 600,000 tpy ethylene glycol
• 450,000 tpy styrene monomer
The project is expected to start production in 2008.
Shuaiba Aromatics
The project is a joint venture between Petrochemical Industries Company (PIC) and
Al Qurain Petrochemical Industries Company. The aromatics complex will consist of
a paraxylene unit with a capacity of 770,000 tpy and a benzene unit with a capacity
of 330,000 tpy. The project is expected to start production in 2009.
45
Zawya, Company Websites
Exhibit 4.27: Chemicals Activity Matrix - Kuwait
Source: Zawya, GCG Analysis
PIC owns 42.5%
interest in EQUATE
January, 2008
GCC Industry Report 85
Saudi Arabia
Overview
Saudi Arabia has the highest number of chemical and petrochemical companies as
well as future planned projects in the GCC. Exhibit 4.28 displays some of the biggest
planned chemical projects in the Kingdom.
Name Yearly Capacity (mn tons) Completion Date
SABIC - Yansab Olefins Complex 4 2008
Sharq - Petrochemical Expansion 2.8 2008
Sahara/Tasnee - Jubail Olefins Complex 2.1 2008
Saudi Kayan Petrochemical Complex 4 2009
Petro Rabigh Refining and Petrochemical Complex 2.4 2009
Saudi Maaden - Phosphate and Fertilizer Complex 3 2010
Sadaf - Jubail 2 Petrochemical Complex 1 2011
Ras Tanura Integrated Refinery and Petrochemicals Complex 2.5 2012
Sipchem Jubail Phase 3 Polyolefins Complex 2.2 2012
The chemical industry in the Kingdom has primarily operated under one main
company – the Saudi Basic Industries Company (SABIC). SABIC has a major share
in the largest up and coming projects which will enable the company to maintain its
market share. However, new players such as the Saudi International Petrochemical
Company (SIPCHEM) and the Sahara Petrochemical Company are entering the
market.
Current Infrastructure
Exhibit 4.29 displays the current and future production of chemicals in Saudi Arabia.
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
Exhibit 4.28: Saudi Arabia Chemical Projects
Exhibit 4.29: KSA Chemicals Production (Million tons)
The KSA’s chemical
production will
increase by 60% in
2012
40
64
2006A 2012E
Current Future
January, 2008
GCC Industry Report 86
Exhibit 4.30 displays the current share of existing companies and the future share
which will result after all planned projects and expansions are complete.
57%
12%
11%
8%
6%
4%
4%
4%
3%
36%
8%
9%
5%
Saudi Kayan
Saudi Maaden
Sharq Exp.
Ras Tanura
Petro Rabigh
Sabic
Yanpet
Sadaf
Saudi Methanol
2012E
2006A
SABIC currently has the highest market share among chemical producers in Saudi
Arabia and will have an even greater market share in the future as the company has
significant stakes in a majority of other companies and their related projects. For
example, SABIC has a significant stake in the Saudi Kayan, Yansab and Maaden
projects. Although the graph does not show this link, this is the reality of the
chemicals industry in the Kingdom.
Major Up and Coming Projects46
1. Saudi Kayan Petrochemical Complex
The project is a joint venture between SABIC and Al Kayan Petrochemical
Company. Production is expected to be 4-5 million tpy of ethylene and various
finished products. The project is expected to start production in 2009.
2. SABIC – Yansab Olefins Complex
The complex will have an output of 4 million tpy of petrochemical products
including ethylene, high-density polyethylene (HDPE), propylene, aromatics and
others. The project is expected to start production in 2008.
3. Saudi Maaden – Phosphate and Fertilizer Complex
The complex is a joint venture between SABIC and Saudi Arabian Mining Company
(MAADEN). The project has access to a phosphate mine with a mineable capacity of
46
Zawya, Company Websites
Source: Company Websites, Zawya, GCG Analysis
Exhibit 4.30: KSA Chemical Company Market Share Comparison
SABIC is one of the
world leaders in
chemical production
January, 2008
GCC Industry Report 87
1.6 billion tons. The project will have a production of 3 million metric tpy of
diammonia phosphate fertilizers. The project is expected to start production in 2010.
4. Sharq – Third Petrochemical Expansion
The project is a joint venture between SABIC and Saudi Petrochemical Development
Company Ltd. The expansion will add 2.8 million tpy of petrochemical products
making Sharq the world’s largest producer of ethylene glycol. The project is
expected to start production in 2008.
5. Petro Rabigh Refining and Petrochemical Complex
The project is a joint venture between Saudi Arabian Oil Company (ARAMCO) and
Sumitomo Chemical Company of Japan. The complex will consist of a 1.3 million
tpy ethylene cracker and related downstream units with a capacity of 2.4 million tpy
of petrochemical products including 900,000 tpy of propylene. The complex will
also expand existing Rabigh oil refining capacity. The project is expected to start
production in 2008.
January, 2008
GCC Industry Report 88
APPENDIX A – KEY COMPANY OVERVIEWS
Aluminum
DUBAL
Senior Management
Position Name
Chairman H H Sheikh Hamdan Bin Rashid Al Maktoum
Vice Chairman H E Ahmed Humaid Al Tayer
Managing Director Mohammed Abdulla Al Ghurair
Director Abdulla Salem Mohammad Al Mana
Director Abdul Wahed Mohammad Al Fahim
Director Hilal Khalfan Bin Dhaher
Director Saeed Mohammed Ahmed Al Tayer
Director Tariq Hussein Khansahebb
CEO Abdullah Kalban
CFO Tony C Sole
Ownership
The Government of Dubai owns 100% of DUBAL.
Key Activities
With over 3000 employees, the UAE’s largest producer is the state-owned Dubai
Aluminum Company (DUBAL). It is located in the emirate of Dubai and has been
operational since 1979. By 2008 production capacity will have increased from a
current 881,000 metric tons to 920,000 metric tons per annum. Production for the
year 2006 was 861,000 tons.
Dubal exports 92% of the aluminum it produces. Most of the aluminum produced by
Dubal is exported to over 280 customers in 44 countries in the Far East, Europe, the
ASEAN region, the Middle East and Mediterranean region, and North America.
Exhibit 5.1: DUBAL Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 89
Gulf Extrusions
Senior Management
Position Name
Chairman Saif Ahmad Al Ghurair
Managing Director Majid Saif Al Ghurair
General Manager Modar Mohammed Al Mekdad
Director of Sales and Marketing Robert Holtkamp
Ownership
Gulf Extrusions is owned by the Al Ghurair Group.
Key Activities
Located in Jebel Ali Free Zone, the plant produces aluminum sections in mill, silver
and color anodized, gold dyed and powder coated finishes. Most of company’s
production, 70%, is used locally in construction sector. The rest is exported to
markets in South East Asia, the GCC countries, Europe and Canada.
With the establishment of primary production facilities, other aluminum related
facilities have also been created. Catering to the high demand for extruded products
in the UAE, Gulf Extrusions, which was established in 1978, produces 65,000 tons
of extruded products per year. It is located in Jebel Ali in proximity to DUBAL
which supplies raw materials to the company. Most of what the company produces,
almost 70%, is consumed locally. A recent expansion will enable a capacity increase
of over 25,000 tons bringing total capacity to over 90,000 tons.
Exhibit 5.2: Gulf Extrusions Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 90
ALBA
Senior Management
Position Name
Chairman Dr Issam Fakroo
Deputy Chairman Nader K. Al Moayyed
Director Fawzi Ahmed Kanoo
Director Shaikh Mohammed bin Khalifa bin Ahmed Al Khalifa
Director Osama Mohammed Al Orayidh
Director Mahmood Hashim Al Koheji
Director David Meen
Director Mohammed H. Al Mady
Director Mutlaq H. Al Morished
Director Mohammed S. Al Jaber
Director Gert Rohrseitz
CEO Ahmed Saleh Al Noaimi
Deputy Chief Executive Mahmood M. Daylami
Ownership
Government of Bahrain
77%
SABIC
20%
Breton Investments
(Germany)
3%
Key Activities
ALBA was formed in 1968, in line with the Government of Bahrain’s strategy and
desire to develop sources of income other than oil. The company offers high quality
products with metal purity levels at 99.88%. The company’s production is being
exported to more than 25 countries across the world and has even been used to build
Mars explorer. Since 2005, with its expansion project, Line 5, (which is the longest
reduction line in the world) the company’s total annual production capacity has
expanded to more than 830,000 tones. ALBA is currently ranked as the eighth largest
producer of aluminum in the world. Production in 2006 was 872,388 tons.
Exhibit 5.4: ALBA Ownership Structure
Source: Zawya, GCG Analysis
Exhibit 5.3: ALBA Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 91
Gulf Aluminum Rolling Mill Company (GARMCO)
Senior Management
Position Name
Chairman Sheikh Ibrahim Bin Khalifa Al-Khalifa
Vice Chairman Ebrahim Bin Saad Al-Showair
Director Salem Bin Nasser Al-Ismaily
Director Abdul-Rahman Al-Shaibi
Director Aref Saleh Khamis
Director Faisal Hamad Al-Roomi
Director Ibtehal Abdulla A. Al Nesuf
Director A.Aziz Bin Sulaiman Al-Humaid
CEO Adel Hamad A. Rahman Hamad
CFO Zakareya A.Rahim Buallay
Ownership
State of Bahrain
39%Industrial Bank of
Kuwait
17%
Republic of Iraq
4%
Gulf Investment
Corporation
5%
Sultanate of Oman
2%State of Qatar
2%
SABIC
31%
Key Activities
The company began operations in 1986 and now produces 160,000 tons of aluminum
foil, coils, sheets and circles annually. The company’s flat rolled aluminum products
are in demand from the construction companies in the region. ALBA is GARMCO’s
key supplier and all ALBA’s aluminum slabs are used by GARMCO. GARMCO
produced 160,000 tons of rolled aluminum in 2005 and upgraded its foil mill
capacity to 35,000 tons in 2006.
Exhibit 5.5: GARMCO Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.6: GARMCO Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 92
Midal Cables
Senior Management
Position Name
Chairman Khalid Rashid Al Zayani
Vice Chairman Dr. Waheeb Linjawi
Director Hamid Rashid Al Zayani
Director Zayed Rashid Al Zayani
Director Mohammed Al Attass
CEO Salman Abdullah Al Shaikh
Managing Director Hamid Rashid Al Zayani
Ownership
Al Zayani
Investments
50%
Saudi Cable
Company
50%
Key Activities
Midal was established in 1977 and during the 30 year time span of operations, its
annual production capacity has reached 150,000 metric tones. The company’s
products include aluminium alloy rods, wires, overhead line conductors, aluminum
clad steel wires and extruded products. Most of the production is exported
worldwide. The Gulf Electrical Transmission Network (GETN) project has boosted
the regional demand for aluminum products in the GCC and is Midal’s key
customer.
Exhibit 5.7: Midal Cables Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.8: Midal Cables Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 93
Aluminium Products Company Ltd. (ALUPCO)
Senior Management
Position Name
Chairman Hashim Saeed Hashim
Director Lubna Suleiman Olayan
Director Abdullah Abu Hamdan
General Manager Ibrahim Al Rashy
Finance Manager Akhtar Ali
Ownership
Olayan Saud i
Inves tment Company
2% Trad ing and Ind us t rial
Group (Ho ld ing )
6 %
Olayan Financing
Comp any
2 8%
Badad International
Company
30%
Hashim Saeed Hashim
34 %
Key Activities
The company was established in 1975 and operates two plants in the Kingdom, one
in Damman and one in Jeddah. ALUPCO specializes in aluminium extrusions and
surface treatments. Its total annual capacities are:
• 65,000 metric tons of aluminium profiles in mill finish.
• 12,000 metric tons of anodized profiles.
• 1,500 metric tons of brightened profiles.
• 33,000 metric tons of coated profiles.
Exhibit 5.9: ALUPCO Senior Management
Exhibit 5.10: ALUPCO Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 94
Steel
Al Nasser Industrial Enterprise (ANIE)
Senior Management
Position Name
Chariman Abdullah Nasser Hawaileel Al Mansoori
President Hilal Nasser Hawaileel Al Mansoori
CEO Sanjay Mehta
Ownership
Al Nasser Industrial Enterprise is fully owned by Al Nasser Holdings.
Key Activities
The group has three steel-related entities under its wing, namely, Gulf Industries
Company, Euro Gulf Steel Industries and Emirates Steel Establishment. In 1992, the
Gulf Steel Industries Company, which produces rebar and welded mesh, was the first
of the three to be established. Products of all three entities are produced using scrap
metal, however, a sponge iron facility is being set up to reduce the dependency on
scrap.
Emirates Steel Establishment produces 60,000 tons of ingots and 240,000 tons of
billets and Gulf Steel Industries produces 120,000 tpy of deformed bars, 36,000 tpy
of cold ribbed bars and 30,000 tpy of welded mesh. ANIE is planning the ANIE
Steel Complex which will have a capacity of 350,000 tpy and will be completed by
2008.
Exhibit 5.11: ANIE Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 95
Emirates Steel Industries (ESI)
Senior Management
Position Name
Chariman Hussein Jassim Al Noweis
Director Soheil Mubarak Al Ameri
Director Ahmad Soheil Al Muheiri
Director Abu Bakr Sediq Khoury
Director Dhafer Ayed Al Ahbabi
Acting CEO Jim White
VP, Finance Steven Pop
Ownership
Emirates Steel Industries is owned by Abu Dhabi Basic Industries Corporation.
Key Activities
ESI is a subsidiary of General Holding Corporation and was formerly known as
Emirates Integrated Steel Factory (EISF). The company operates a rolling mill to
produce reinforcement bars for the construction industry. The company produced
600,000 tons of rebar in 2006 and is currently undergoing a major expansion project
in order to become the first steel making facility in the GCC. The expansion is
valued at USD 900 million and output is expected to increase to 2 million tpy by
2010.
Exhibit 5.12: ESI Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 96
Alam Steel Industries Company (ASI)
Senior Management
Position Name
Chairman Shyam Bhatia
Director Vikram Bhatia
General Manager Naraani Ved
Financial Controller R Mahalingam
Finance Manager Mahali Van
Ownership
ASI is fully owned by Alam Group.
Key Activities
Alam Steel was founded in 1979 in Dubai. The company caters to the demand for
rebar in the construction industry. The company expects rebar consumption to grow
20% per annum for the next three years and current production capacity is 300,000
tpy of rebar.
Exhibit 5.13: ASI Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 97
Gulf Industrial Investment Company (GIIC)
Senior Management
Position Name
Chairman Abdalla H Nour
Vice Chairman Khaled Al Qadiri
CEO Dr Ali Basdag
GM, Admin. And Communications Sayed Karam
GM, Technical Affairs Paul Livel
Finance Manager Issam Al Othman
Ownership
Gulf Inves tment Cor por ation
71%
Qatar Steel Company
24%
Kuwait Foundr y Company
5%
Key Activities
The company operates an iron ore pelletizing plant in Bahrain with an annual
capacity of 4 million tpy of iron ore pellets. The company is spearheading Bahrain’s
two steel projects which are also some of the largest planned steel projects in the
GCC. The projects, namely, GIIC Iron Ore Pellet Plant and the GIIC Steel Complex,
will have a combined capacity of 9 million tons to be added by 2010.
Exhibit 5.14: GIIC Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.15: GIIC Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 98
Qatar Steel
Senior Management
Position Name
Chariman HH Youssef Hussein Kamal
Vice Chairman Mohammed Saleh Al Sada
Director Nasser Mubarak Al Shefy
Director Fahed Hamad Al Mohannady
Director HH Nasser Bin Hamad Al Thani
Director Abdulrahman Ahmad Al Sheeby
Director Mohammed Al Hitmy
Board Secretary Dr Idris Ibrahim
General Manager HH Nasser Bin Hamad Al Thani
Finance Manager Reemi Maseeh Rouhani
Ownership
Qatar Steel is wholly owned by Industries Qatar.
Key Activities
Qatar Steel (formerly QASCO) was established in 1974 in the Mesaieed Industrial
City and prides itself on being the first integrated plant in the Arabian Gulf. Steel
production started in 1979 and the company produces 1.2 million tpy of molten steel
and 740,000 tpy of plain and deformed bars. Plant facilities include a Combo Mega
Module, Electric Arc Furnaces, a Continuous Casting plant and Rolling Mills. A
Main Power Substation and facilities for sea/fresh water, compressed air, and natural
gas are also included.
A branch of Qatar Steel, Qatar Steel Company FZE was established in 2003 in the
Dubai’s Jebel Ali Free Zone. The company operates a wire rod mill and rebar mill
with capacities of 240,000 metric tons and 50,000 metric tons respectively. The
company caters to demand within the GCC as well as international markets.
Exhibit 5.16: Qatar Steel Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 99
Sharq Sohar Steel Rolling Mills (Sohar Steel)
Senior Management
Position Name
Chairman Jamil Ali Sultan
General Manager Vinod Bihari
Ownership
The company is owned by Middle East Traders (Oman).
Key Activities
Sohar Steel was established in Oman in 1995 and is strategically located in the Sohar
Industrial Estate area with additional offices in the UAE and KSA. The company
produces rebar via imported steel billets and has an annual capacity of 250,000
metric tons. Sohar Steel is currently adding a steel making unit for producing
continuous cast steel billets.
Exhibit 5.17: Sharq Sohar Steel Rolling Mills Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 100
Al Jazeera Steel Products Company
Senior Management
Position Name
Chairman Khalil Abdullah Mohammed Al Khonji
Vice Chariman Mohammed Abdullah Moosa
Director Yousef Al Harthy
Director Mukesh Sawhney
Director Rajeev Kulkarni
Director Shailesh Kumar Dash
CEO Sunil Gupta
Finance Manager P Finket
Ownership
Glo ba l Inves tment
Ho us e [via Glo ba l
Buyo ut Fund]
51%
P ublic
28%
Abja r Trading
Co mpany
6%
Mo o s a Abdul
Rahman Has s an and
Co mpany
9%
Abdullah Mo o s a
Abdulrahman
6%
Key Activities
The company, formerly known as Jazeera Tubes, is a manufacturer of steel and
galvanized tubes that exports its products to 25 countries including Australia and
those in North America and Europe. The company has a capacity of 300,000 tpy of
pipes.
Exhibit 5.18: Al Jazeera Steel Products Co. Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.19: Al Jazeera Steel Products Co. Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 101
United Steel Industrial Company
Senior Management
Position Name
Chairman Awad Al Khaledi
Vice Chairman A F Vardinejad
Director Dr Iraj Akbarieh
Director Adnan Abdulnabi Al Moosa
Director Abdulwahid Al Awadi
Director Ahmad Katani
Director Abdulrahman Ali
Ownership
Kuwaiti investors
51%
National Iranian Steel
Company
49%
Key Activities
The company was established in 1996 as a joint venture between Kuwaiti investors
and a German company. The company has a rolling mill factory and is the only
manufacturer of rebar in Kuwait. Plant capacity is 600,000 TPY.
Exhibit 5.20: United Steel Industrial Co. Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.21: United Steel Industrial Co. Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 102
Al Oula Steel Manufacturing Company (Al Oula)
Senior Management
Position Name
Chairman Hussein Al Kharafi
Vice Chairman Ahmad Al Kharafi
General Manager Fahed Al Jouan
Finance Manager Ahmad Al Kharafi
Ownership
Al Oula Co. is privately owned by Fahed Al Jouan and Hussein Ali Kharafi.
Key Activities
Al Oula was established in 2002 and is located in the Shuaiba Industrial Area. The
company has an annual production capacity of 500,000 tons of steel billets.
Exhibit 5.22: Al Oula Co. Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 103
Kuwait Reinforced Steel Manufacturing Company
Senior Management
Position Name
Chairman Ali Hassan Al Sarraf
Vice Chairman Alaa Al Sarraf
Director Mohammed Al Sarraf
Director Abdulaziz Al Sarraf
Director Fahed Al Sarraf
Director Jaber Al Sarraf
CEO Mustafa M Haidar
CFO Alaa Al Sarraf
Ownership
The company is privately owned by Ali Al Sarraf International Group Company.
Key Activities
The company was established in 2002 and has a capacity to produce 150,000 metric
tpy of steel bars. As a result of an expansion project which started last year, the
company’s steel bar production capacity is expected to reach 400,000 tons sometime
in 2007.
Exhibit 5.23: Kuwait Reinforced Steel Manufacturing Co. Senior
Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 104
Saudi Iron and Steel Company (HADEED)
Senior Management
Position Name
Chairman Mansour Bin Saleh Al Kharboosh
Director Mohammed Bin Abdulaziz Al Rayes
Director Abdulrahman Bin Abdullah Abu Ali
Director Khaled Bin Saleh Al Torairy
Director Abdullah Bin Khalifa Abu Ayanaya
Director Hesham Bin Abdullatif Al Hamaly
President Abdulaziz Bin Suleiman Al Homayel
Ownership
HADEED is wholly owned by Saudi Basic Industries Corporation (SABIC).
Key Activities
HADEED is the first integrated steel plant in Saudi Arabia and was established in
1983. The company operates three factories in the Kingdom and produces
commercial and reinforcement steel. The company operates a flat products facility
and a long products complex. The former has a capacity of 2 million tpy and the
latter produces 1.2 million tons of rebar and 700,000 tons of rods annually.
HADEED is planning to upgrade their long products output to 3 million tons
annually and this will comprise 60 percent of the company’s output.
Exhibit 5.24: HADEED Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 105
Al Ittefaq Steel Products Company (ISPC – Dammam)
Senior Management
Position Name
Chairman Hilal Hussein Al Tuwairqi
Vice Chairman Mohammed Tariq Barlas
Director Khaled Hilal Al Tuwairqi
Director Youssef Hilal Al Tuwairqi
Director Abdullah Hilal Al Tuwairqi
CEO Mohammed Tariq Barlas
CFO Shibbir Hussein Raffiqi
COO Imran Agha
Ownership
Saudi Arabia’s Al Tuwairqi Group owns 76.9% of ISPC and Bahrain’s Gulf
International Bank owns 1.7% of the company. The remainder of ownership
privately lies with Abdullah Al Jaber, Ali Hussein Al Hadat, and Hamad Al
Suleiman.
Al Tuwairqi Group
75%
Private Investors
23%
Gulf Intl. Bank
2%
Key Activities
Al Ittefaq Steel Products Company is the flagship company of the Al Tuwairqi
Group. The company specializes in the production of hot-rolled steel rebar.
Production is over 1 million metric tons per annum.
Exhibit 5.25: ISPC Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.26: ISPC Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 106
Al Rajhi Steel Industries
Senior Management
Position Name
Chairman Mohammed Abdulaziz Al Rajhi
Acting President Khaled Abdulhamid Al Suleimani
Vice President,Material Handling Mehdi Naser Al Qahtani
Vice President,Operations Ahmad Abdulrahman Al Amoudi
Ownership
Mohammed Abdulaziz Al Rajhi and sons privately own the company.
Key Activities
Rajhi Steel was established in 1984 by Sheikh Al-Rajhi. Products include various
kinds of commercial steel products (coils, tubes, sheets) and 500,000 tons of rebar
each year from the Al Aseemah factory.
Exhibit 5.27: Al Rajhi Steel Industries Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 107
United Gulf Steel Mill Company (UGSM)
Senior Management
Position Name
Vice Chairman Mazen K Allahiq
Managing Director Mazen K Allahiq
General Manager Anan Gopal
CFO Dilip George
Ownership
UGSM is privately owned by Mazen Al Lahiq and the Mazrui Holding Company.
Key Activities
UGSM is the only manufacturer of hot rolled medium section structural steel
products in the GCC. The company is located in Jubail Industrial City. The rolling
mill capacity is 450,000 metric tons per annum.
Exhibit 5.28: UGSM Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 108
Hidada
Senior Management
Position Name
Chairman Khaled Ahmad Youssef Zainal Alireza
Director Mohammed Ahmad Youssef Zainal Alireza
Director Youssef Ahmad Youssef Zainal Alireza
Director Adnan Mamani
President and COO Adnan Abduljaleel Abduljawad
VP, Finance and Admin. Mohammed Mashhoud
VP, Structural Steel Dawood Khumais
VP, Sales and Marketing Nabeel Hamshari
VP, Support Services Ahmad Saim Al Dahr
Ownership
Xenel Industries
95%
Xenel Marketing
5%
Key Activities
Hidada was formed in 1982 and is owned by Xenel Indsutries, a KSA-based
industrial conglomerate. Hidada has 6 factories in the Jeddah Industrial Area and is
involved in the design, engineering and fabrication of structural steel products.
Production of steel is 184,000 tpy.
Exhibit 5.29: Hidada Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.30: Hidada Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 109
Universal Metal Coating Company (UNICOIL)
Senior Management
Position Name
Chairman Fahad Abdullah Al Zamil
Vice Chairman Abdulrahman Al Rashed
Director Fahad Z Al Thukair
President Fahad Z Al Thukair
General Manager Babandra Duo
General Manager, Marketing Ahmad Shaaban
General Manager, Admin and IT Adnan Abdullah Ali
Finance Manager Mounir Zaidi
Strategic Planning Manager Shaker Al Mousa
Ownership
Rashed Al Rashed and
Sons Group
50%
Zamil Group Holding
Company
50%
Key Activities
UNICOIL was formerly known as the BHP Unicoil Company and was established in
1997. Production is 370,000 tpy of galvanized and pre-painted steel.
Exhibit 5.31: UNICOIL Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.32: UNICOIL Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 110
Cement
Union Cement
Senior Management
Position Name
Chairman Sheikh Saqr Bin Khalid H Al Qassimi
Vice Chairman Sheikh Taleb Bin Saqr Al Qassimi
Vice Chairman Abdullah Mohammed Saeed Al Sayyah
Director Sheikh Rami Khalid Abdullah Al Qassimi
Director Abdullah Ahmad Rashed Nuaimi
Director Mussabah Khamees Al Mazroui
Director Ahmad Hamdan Malek
Managing Director Abdullah Mohammed Saeed Al Sayyah
General Manager Magnus Dallen
Finance Manager Roar Nordkvelle
Ownership
Go vernment o f Ras Al
Khaim ah
41%
Abu Dhabi Inves tment
Autho rity
20%
Khalid Abdullah Al Qas imi
20%
P ublic
19%
Key Activities
The company is the UAE’s first cement producer. It started production in 1975 and is
located in RAK. Production capacity currently stands at 4.2 million tons per year of
Portland cement after the company recently added a 10,000 tpy production line.
Exhibit 5.33: Union Cement Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.34: Union Cement Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 111
Gulf Cement Company
Senior Management
Position Name
Chairman Sheikh Omar bin Saqr Al Qasimi
Vice Chairman Hamad Ahmad Al Omairi
Director Sheikh Muntaser bin Khaled Al Qasimi
Director Sheikh Jamal bin Saqr Al Qasimi
Director Salem Abdullah Salem
Director Ibrahim Mansour Rajhi
Director Abdulaziz Hamad Al Wonayis
Director Abdulaziz Saad Abdulaziz Al Rashed
General Manager Ahmad Abdullah Al Amash
Finance Manager Ahmad Mansour
Ownership
Public
51%
NIC Kuwait
27%
Private Investor
9%
RAK Government
7%
Banque Saudi Fransi
6%
Key Activities
Gulf Cement is located in Ras Al Khaimah and started production in 1989. The
company produces both cement and clinker in quantities of 2.5 million tons and 1.3
million tons per year respectively. In 2005, the company added a new clinker
production line with a capacity of over 2.3 million tons per year. The company
produces four types of Portland cement and one type of slag. A variety of fuels are
used in production.
Exhibit 5.35: Gulf Cement Company Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.36: Gulf Cement Company Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 112
Emirates Cement Factory (ECF)
Senior Management
Position Name
General Manager Mohsen Hamad Al Marri
Technical Manager Abdulaziz Mohammed Asad
Admin. Manager Saleh Salem Al Kindy
Financial and Commercial Manager Yahya Suleiman Al Ameri
Production Manager Abdulrahman Abdulal
Ownership
Emirates Cement Factory is owned by Arkan Building Materials Company.
Key Activities
The Emirates Cement Factory is part of the Arkan Building Group, which owns
Emirates Cement Factory and Emirates Concrete. Emirates Cement Factory initiated
production in 1976. The factory has production capacities of 813,000 tons of clinker
and 1.2 million tons of cement per year. The factory is located in the Al Ain area of
Abu Dhabi where limestone deposits are available. Al Ain Cement Factory, which
will produce 3.1 million tons of clinker, is a current expansion project of the
company.
Exhibit 5.37: ECF Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 113
Bahrain Precast Concrete Company (BPC Group)
Senior Management
Position Name
Chairman Ahmad Ali Al Aali
Director Hani Hassan Al Aali
Director Adel Hassan Al Aali
General Manager Goran Hogberg
Finance Manager K Divakaran
Ownership
Haji Hassan Group wholly owns Bahrain Precast Concrete Company.
Key Activities
The Bahrain Precast Concrete Group was established in 1977 and is owned by the
Haji Hassan Group which specializes in a variety of trading activities. The associated
companies of the group are BPC Bahrain, United Precast Concrete (UPC) Dubai,
UPC Abu Dhabi and UPC Qatar. BPC Bahrain began operations in 1978 and was the
first company of its kind in the country. The company produces concrete and precast
products such as hollow core slabs, panels, facade elements, boundary walls, etc.
Exhibit 5.38: BPC Group Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 114
Qatar National Cement Company (QNCC)
Senior Management
Position Name
Chairman Salem Butti Al Nuaimi
Vice Chairman Khalil Ibrahim Redwani
Director Abdulaziz Bin Jassim Al Thani
Director Bader Ahmad Al Qayed
Director Hassan Al Jufairi
Director Sulaiman Khaled Al Sada
Director Najib Khalifa Al Sada
Director Abdullatif Ibrahim Al Muhamali
Managing Director Salem Butti Al Nuaimi
General Manager Mohammed Ali Al Sulaiti
Ownership
Public
56%
Government of Qatar
43%
Qatar Insurance
Company
1%
Key Activities
QNCC, also known as Qatar Cement, was established in 1965 and was the first
cement company in Qatar. The company has a combined production capacity of over
1 million tons of clinker and cement per year. The company is directing resources
towards the production of cement required by the oil and gas industry, namely oil
well cement and slag cement. The company added capacity of around 1.4 million and
a fourth production line with a capacity of around 1.8 million is currently underway.
Exhibit 5.39: QNCC Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.40: QNCC Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 115
Oman Cement Company (OCC)
Senior Management
Position Name
Chairman Qathan Yarub Al Busaidi
Vice Chairman Saleh Bin Nasser Bin Juma Al Araimi
Director Jamal Shamis Al Hooti
Director Zahir Bin Mubarak Bin Taiseer Al Noobi
Director Saud Bin Nasser Bin Rashed Al Shakayli
Director Hamdan Mohammed Saleh Al Wahaibi
Director Najeeb Bin Abdullah Bin Mohammed Al Khonji
CEO Jamal Shamis Al Hooti
GM-Resources and Services Najim M Al Timami
Ownership
Public
49%Government
51%
Key Activities
Oman Cement Company was created in 1978. In 1983, a cement plant was set up in
the Rusayl Industrial Estate (North Oman) close to sources of limestone and silica
and had a production capacity of over 600,000 tpy. Due to cyclone Gonu, the
company’s gas supplies were hit and this cost the company large losses. The
company produces 1.65 million tons of cement per year and 1.3 million tons of
clinker. Expansions plans include a cement mill with a capacity of 1.1 million tpy
and a clinker plant with a capacity of 1.46 million tpy.
Exhibit 5.41: OCC Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.42: OCC Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 116
Raysut Cement Company (RCC)
Senior Management
Position Name
Chairman Mohammed Bin Alawi Bin Ali Muquaibal
Vice Chairman Mohammed Bin Abdullah Bin Said Al Rawas
Director Saeed Bin Hamad Al Rawas
Director Ahmad Hussein Baqer
Director Zenhom Zahran
Director Saeed Bin Abdulaziz Sabah Al Rawas
Director Mohammed Bin Youssef Bin Alawi Al Ibrahim
Director Mohammed Bin Alawi Bin Abdullah Al Ibrahim
Director Hamed Bin Mohammed Al Sayari
Director Atef Bin Abdulhamid Ahmad Al Kayissi
Director Fahed Bin Abdullah Bin Abdulaziz Al Rajhi
CEO Mohammed Ahmad Al Dheeb
Chief Marketing Officer and Business Support Manager Khaled Saad Abdoon
Finance Manager Aref Javed
Ownership
Public
52%
Islamic Al Inma Bank
12%
Abu Dhabi Fund for
Development
10%
Abdullah Abdulaziz Al
Rajhi
10%
Dolphin International
9%
Sindbad International
Trading
7%
`
Key Activities
The company was established in 1981 and began production in 1984. It is located in
the Raysut area in the south of Oman. Production capacity is 1.9 million tons of
cement per year. Recently the company launched a floating terminal to augment
current cement supplies by around 2000 tons of bagged and bulk cement per day.
Raysut Cement’s capacity will increase to 3 million tpy in 2008 upon the completion
of the commissioning of a fourth production line.
Exhibit 5.43: RCC Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.44: RCC Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 117
Kuwait Cement Company (KCC)
Senior Management
Position Name
Chairman Rashed Abdulaziz Al Rashed
Vice Chairman Abdullah Mohammed Al Saad
First Executive Director Abdulmutaileb Ismail Bahbahani
Director Jaber Youssef Al Salman Al Sabah
Director Suleiman Khaled Al Ghunaim
Director Youssef Badr Ahmad Al Kharafi
Director Khaled Abdullah Al Rabeiah
Director Saleh Abdullah Al Kooh
Director Dharar Khaled Fahd Al Rabah
Director Faysal Abdullah Al Khalaf
Director Bassel Saad Abdulaziz Al Rashed
Director Yaaqoub Youssef Al Sakr
Ownership
Public
39%
KIA
29%
NI Group
25%
Al Rashed Industrial Trading
and Contracting Co.
7%
Key Activities
The company, headquartered in the Cement House premises, was established in 1968
to initiate primary production of clinker and cement. Cement production capacity in
1972 was 300,000 tons and as a result of various expansion projects current capacity
stands at 2.07 million tons per year. A factory for the production of white cement
was set up in 1979 and had a production capacity of 75,000 metric tons per year. The
Company’s factories produce ordinary Portland cement, 2 kinds of resisting cement
and masonry cement. Currently, a gray cement mill is being converted into a white
cement mill with a capacity of 115,000 metric tons per annum.
Exhibit 5.45: KCC Senior Management
Source: Zawya, GCG Analysis
Exhibit 5.46: KCC Ownership Structure
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 118
Chemicals and Plastics
Abu Dhabi Polymers Company (BOROUGE)
Senior Management
Position Name
Chairman HH Youssef Omair Bin Youssef
Director Abdullah Saeed Al Badi
Director Ali Saeed Al Badi
Director Mohammed Al Azdi
Director Henry Sperle
Director Herbert Willerth
Director Espen Ostmoe
Director Harri Bucht
Director Jamal Al Ramahi
Director Paul Baron
Director Adel Khalifa Al Buainain
Ceo Harri Bucht
CFO Ali Al Murar
VP, Operations Paul Baron
Ownership
ADNOC
60%
Borealis
40%
Exhibit 5.47: BOROUGE Senior Management
Exhibit 5.48: BOROUGE Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 119
Key Activities
Borouge is a JV between Abu Dhabi National Oil Company (ADNOC) and Europe-
based plastics producer Borealis. The company currently produces polyethylene and
will produce polypropylene via the new facility Borouge 2. Currently the company
has a 600,000 tonne ethylene cracker unit. In February 2007 the company signed a
contract to build an ethylene cracker with a production capacity of 1.5 million tons
per year bringing total capacity to 2 million tons per year. The additional cracker unit
will enable the production of polypropylene.
January, 2008
GCC Industry Report 120
Abu Dhabi Oil Refining Company (TAKREER)
Senior Management
Position Name
Chairman HH Youssef Omair Bin Youssef
General Manager Jassem Ali Al Sayegh
Head of Business Development and Studies Fareed Mohammed Al Jaberi
Assistant GM, Operations Ahmad Omar Abdullah
Finance Manager Abdullah Salem Al Zoaby
Ownership
TAKREER is 100% owned by the Government of Abu Dhabi.
Key Activities
Takreer PJSC was established in 1999 by the Abu Dhabi National Oil Company
(ADNOC) to take over the Abu Dhabi and Ruwais refineries. The company’s core
activities include refining crude oil, producing petroleum products and granulated
sulphur. So far, the focus has been on upstream activities, but now the company is
expanding activities into the downstream sector.
The company operates 2 refineries, the Abu Dhabi Refinery and the Ruwais Refinery
and together they produce over 23 million tpy of products such as liquefied
petroleum gas, naptha, unleaded gasoline and liquid and granulated sulphur. Takreer
is currently planning an expansion of the Ruwais refinery.
Exhibit 5.49: Takreer Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 121
Ruwais Fertilizer Industries (FERTIL)
Senior Management
Position Name
Chairman HH Youssef Omair Bin Youssef
General Manager Mohammed Rashed Al Rashed
Assistant GM and Marketing Manager Ahmad Saeed Ahmad Ghaleb Al Muheiri
Financial Controller Ali Mussalam
Finance and IS Manager Ayoub Mohammed Saleh
HR and Admin. Manager Hassan Al Zaabi
Ownership
Key
Activities
ADNOC
67%
Total (France)
33%
Key Activities
Fertil produces ammonia and urea and is a part of the Abu Dhabi National Oil
Company (ADNOC) group. The company was established in 1980 as a joint venture
between ADNOC and France-based integrated oil and gas company Total. Ammonia
production is 478,150 metric tpy and urea production is 675,250 metric tpy. Of the
output, 10% is sold within the UAE while the rest is exported.
Exhibit 5.50: FERTIL Senior Management
Exhibit 5.51: FERTIL Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 122
Gulf Petrochemical Industries Company (GPIC)
Senior Management
Position Name
Chairman HH Issa Bin Ali Al Khalifa
Vice Chairman Nasser Ahmad Al Sayyari
Managing Director Nasser Ahmad Al Sayyari
General Manager Abdulrahman Abdulhussein Jawahery
Director Dr Mohammed Abdulrahman Al Terkait
Director Anwar Saeed Bin Salma
Director Ahmad Al Sayed
Director Youssef Hamad Al Ateeqi
Director Abdulaziz Mohammed Al Rawaf
Director Ahmad Ali Al Sharyan
Director Mohammed Bin Ali Al Yumni
Ownership
Key Activities
SABIC (KSA)
34%
PIC (Kuwait)
33%
HCOG (Bahrain)
33%
Key Activities
GPIC produces ammonia, methanol and urea in quantities of 400,000 tpy, 600,000
tpy and 400,000 tpy respectively. The company was established in 1979 and uses
Bahrain’s natural gas reserves as a feedstock.
Exhibit 5.53: GPIC Senior Management
Exhibit 5.54: GPIC Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 123
Industries Qatar (IQ)
Senior Management
Position Name
Chairman, Minister of Energy and Industry HE Abdullah Bin Hamad Al Attiyah
Vice Chairman, Minister of Finance Youssef Hussein Kamal
Managing Director HE Abdullah Bin Hamad Al Attiyah
Director Hamad Rashed Al Mohannadi
Director Fahad Hamad Al Mohannadi
Director Abdullah Hussein Salatt
Director Ibrahim Al Ibrahim
Director Faisal Mohammed Al Suwaidi
Ownership
Key Activities
Qatar Petroleum
70%
Public
21%
Private
9%
Exhibit 5.55: Industries Qatar Senior Management
Exhibit 5.56: Industries Qatar Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 124
Key Activities
IQ is a major industrial conglomerate with the following chemicals companies in its
group of companies:
1. Qatar Fertilizer Company (QAFCO)
QAFCO was established in 1969 and set up its first factory in 1973. The company is
majority owned by Industries Qatar. The company uses Qatar’s natural gas reserves
to produce ammonia and urea which are produced via 4 production trains. Ammonia
and urea production stand at 2 million tpy and 3 million tpy respectively. The
company is in the midst of an expansion project, namely, QAFCO V.
2. Qatar Fuel Additives Company Limited (QAFAC)
QAFAC was established in 1991 and produces methanol and methl tertiary butyl
ether (MTBE) for export purposes. The plant is designed to produce 832,000 tpy
menthol and 610,000 tpy MTBE. The company is undergoing the QAFAC-II
expansion project.
3. Qatar Petrochemical Company (QAPCO)
QAPCO was established in 1974 and ethylene and low density polyethylene (LDPE)
are the company’s primary products. The ethylene plant has a designed capacity of
720,000 metric tpy and the two LDPE plants have a designed capacity of 360,000
metric tpy. QAPAC is undertaking various expansion projects such as Qatofin, Ras
Laffan Cracker. The company recently completed the EP2 Cracker Expansion
Project which increased designed ethylene production capacity from 535,000 metric
tpy to 720,000 tpy.
January, 2008
GCC Industry Report 125
Oman Oil Company (OOC)
Senior Management
Position Name
Chairman, Minister of Commerce and Industry HH Maqbool Bin Ali Sultan
Vice Chairman, Minister of Oil and Gas HH Mohammed Bin Hamed Al Rumhy
Director HH Mohammed Bin Nasser Al Khasibi
Director HH Salem Bin Hassan Macki
Director HH Salem Abdullah Al Rawas
CEO Ahmad Bin Salem Al Wahaibi
CFO Venugopal Venkatesh
Ownership
OOC is 100% owned by the Government of the Sultanate of Oman.
Key Activities
OOC is owned by the government and was established in 1992. One of the projects
of the company is the Oman India Fertilizer Company (OMIFCO). OMIFCO was
established in 2003 and is a joint venture between OOC and 2 fertilizer companies
based in India. The company’s products consist of ammonia and urea via a two-train
manufacturing plant. The production is 1.65 million metric tpy of ammonia and
250,000 metric tpy of ammonia.
OOC is in charge of the Salalah Menthol Company (SMC) project, which is to be
completed in 2010.
Exhibit 5.57: OOC Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 126
EQUATE Petrochemical Company (EQUATE)
Senior Management
Position Name
Chairperson Maha Abdulrahman Mulla Hussein
President and CEO Hamad Al Terkait
CFO Abdulkarim Mubarak
Ownership
Key Activities
Dow Chemical
Company
42.50%
PIC (Kuwait)
42.50%
BPC
9%
QPIC
6%
Key Activities
EQUATE was formed in 1995 as a joint venture between Petrochemical Industries
Company (PIC), Union Carbide Corporation and Boubyan Petrochemical Company.
The company began production in 1997 and its main products are ethylene glycol,
polyethylene and polypropylene with capacities of 400,000 tpy, 600,000 tpy and
122,000 tpy respectively. Currently, the company is undertaking the Olefins II
project which it will manage, operate and maintain.
Exhibit 5.58: EQUATE Senior Management
Exhibit 5.60: EQUATE Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 127
Petrochemical Industries Company (PIC)
Senior Management
Position Name
Chairman and Managing Director Saad Ali Al Shuwaib
Vice Chairman Maha Abdulrahman Mulla Hussein
Director Satha Nasser Al Sabah
Director Talal Al Adhi Al Sabah
Director Hussein Mohammed Ismail
Director Youssef Abdullah Al Yateem
Director Ibrahim Mohammed Al Ghanim
Ownership
PIC is 100% owned by the Kuwait Petroleum Corporation (KPC) which is owned by
the Government of Kuwait.
Key Activities
PIC is a government owned subsidiary of Kuwait Petroleum Corporation (KPC) and
was established in 1963. PIC has been involved in several joint ventures both
regionally and internationally. The company’s joint ventures in Kuwait are
EQUATE, The Kuwait Aromatics Company (TKAC), The Kuwait Olefin Company
(TKOC), The Kuwait Styrene Company (TKSC). The company will invest in the
EQUATE Olefins II project and is setting up TKAC, TKOC and TKSC to manage
the different production lines of the project. The company is also involved in an
aromatics project.
Exhibit 5.61: PIC Senior Management
Source: Zawya, GCG Analysis
January, 2008
GCC Industry Report 128
Saudi Basic Industries Corporation (SABIC)
Senior Management
Position Name
Chairman HH Prince Saud Bin Abdallah Bin Thanyan Al Saud
Vice Chairman Mohammed Hamad Al Mady
Director Ahmad I Al Hakami
Director Abdullah Mohammed Al Issa
Director Mohammed S Abanumay
Director Abdulmuhsin Bin Abdulaziz Al Faris
Director Saleh E Al Husseini
CEO Mohammed Hamad Al Mady
Ownership
Key Activities
Government of
Saudi Arabia
70%
Public
30%
Key Activities
SABIC, headquartered in Riyadh was established in 1976 by royal decree. It is a
public company of which the government owns 70%. The company produces
chemicals, fertilizers, plastics and metals. Total production in 2006 was 49 million
metric tons. Wholly-owned affiliates of SABIC are Arabian Petrochemical Company
(PETROKEMYA) and Jubail United Petrochemical Company (UNITED).
SABIC currently has 2 projects under construction. These are Yanbu National
Petrochemical Company (YANSAB) and SAUDI KAYAN.
Exhibit 5.62: SABIC Senior Management
Exhibit 5.63: SABIC Ownership Structure
Source: Zawya, GCG Analysis
Source: Zawya, GCG Analysis
About Gulf Capital Group (DIFC) Limited
GCG is a financial advisory services firm offering financial services to select clients in the GCC region. GCG traces its roots to a 70-year
old Canadian boutique investment bank. This unique relationship enables GCG to think globally and act regionally.
GCG has positioned itself as the leading advisor to mid-market clients in select industry sectors across the MENA and Asia regions
through proprietary transaction models, industry expertise and an exceptional network of regional and global contacts.
GCG is licensed and operates from the Dubai International Financial Centre and is regulated by the Dubai Financial Services Authority.
Dubai International Financial Centre is a wholesale jurisdiction and GCG's services are not directed at retail customers. Please note that
GCG services are available to only such individuals as deemed to satisfy the regulatory criteria to be a 'Client' and that meets GCG's
'KYC' requirements. GCG deals with individuals having sufficient experience and understanding of the financial markets & having at
least USD1 million in liquid assets and those corporates having a called-up share capital or net assets worth USD5 million or more. This
is not an offer or solicitation of an offer to sell, purchase or subscribe to any particular investment.
Disclaimer
This research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it
should not be relied on as such.
This report does not provide individually tailored investment advice. It has been prepared without regard to the individual financial
circumstances and objectives of persons who receive it. The securities discussed in this report may not be suitable for all investors. GCG
recommends that investors independently evaluate particular investments and strategies and encourages investors to seek the advice of a
financial adviser. The appropriateness of a particular investment or strategy will depend on investors’ individual circumstances and
objectives.
This report is not an offer to buy or sell any security or to participate in any trading strategy. Investors should seek financial advice
regarding the appropriateness of investing in any securities of investment strategies discussed or recommended in this report and should
understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any,
may fluctuate and that each security’s price or value may rise or fall. Past performance is not necessarily a guide to future performance,
future returns are not guaranteed and a loss of original capital may occur.
Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or opinion or futures contracts.
It is confirmed that GCG or any of its associates:
do not hold shareholding of 1% or more of the total issued share capital in any of the companies covered in the report;
do not act as corporate broker for any of the companies covered in the report;
have not undertaken any corporate finance business over the past 12 months with or for the companies covered in the report ;
are not Market Makers on any of the securities covered in the report.
Further confirmed that, none of the companies covered in the report hold any material shareholding in GCG.
Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in
this report. In addition, investors in securities across different exchanges, whose values are influenced by the currency of the underlying
security, effectively assume currency risk.
Gulf Capital Group (DIFC) Ltd. is a financial services firm regulated by the Dubai Financial Services Authority and located in the Dubai
International Financial Centre. GCG has no link or affiliation with any other financial services firms in the UAE which utilize or go
under the name ‘Gulf Capital’, or any usage similar thereto, and are currently or in the future will be regulated by the UAE Central Bank
or other UAE Federal Regulatory Authorities.
This report or any portion hereof may not be reprinted, sold or redistributed without the prior written consent of GCG.
Gulf Capital Group (DIFC) Limited
Dubai International Financial Center
Registered Office – Offices 5 & 6, Level 4, Precinct Building 3,
P O Box – 214851, Dubai, UAE
Tel: +971 4 363 5730 Telefax: +971 4 363 5739
Website: www.gulfcapitalgroup.com
Email: [email protected]
GCG is regulated by the Dubai Financial Services Authority