Emirates Steel, the UAE's largest steel manufacturer, said on Monday the imposition of 25 per cent tariff on steel imports by the US would impact its overseas sales.
"We export 5 per cent of our total overseas supply to the United States... there will be some effect on us," Saeed Ghumran Al Remeithi, the company's chief executive, was quoted by Reuters as saying as he unveiled plans for production capacity boost to 3.5 million tonnes from 3.2 million tonnes per year.
Currently, the Abu Dhabi-based company, wholly-owned by General Holding Corp (Senaat), exports worldwide 20 per cent of its output.
Last Thursday, US President Donald Trump kicked off a potential trade war by imposing heavy tariffs of 25 per cent on steel and 10 per cent on aluminum imports, effectively placing a tax on every foreign shipment of those metals into the US. The move by the world's largest steel importer sent stock markets reeling and prompted threats of retaliation from Canada and the European Union.
At an annual media briefing held at Emirates Steel's headquarters, Al Remeithi said the company achieved a 22 per cent growth in revenues to Dh6.6 billion and exported to 40 countries in 2017.
He said the results clearly indicate "the success of the company's resilient business model, despite the challenges faced by the metals and steel industry globally."
In 2017, steel output increased to more than 3.2 million tonnes, up from 3.1 million tonness in 2016. While export sales accounted for 20 per cent of total volumes, with the remaining 80 per cent being consumed within the UAE, the company enjoys a domestic market share of 60 per cent.
"The increasing demand for Emirates Steel's products in the international markets is testament to their high quality, which will open further doors for entering new emerging and developed markets. We will continue to increase sales revenues and reduce direct and indirect costs to further improve the company's financial performance," said the CEO.
"This will be achieved by increasing volumes, driving efficiencies and further developing our product range to achieve our production capacity of 3.5 million tonnes per year, raising safety standards and entering new markets to further expand our global footprint."
The company is currently diversifying its product strategy with the development of value-added products. Recently, the steel producer developed a scrap shredding facility that supports increased efficiencies in the operation of electric arc furnaces. "This new facility will play a major role in re-cycling scrap metal available in the Emirates, as well as reducing operating costs and increasing flexibility for the primary feedstock used by the company," said Al Remeithi.
In addition, the company has successfully designed and developed a twin-casting system, the first-of-its-kind in the UAE, which will enable the company to further increase volumes.
"Emirates Steel continues to focus on manufacturing high quality steel products to meet the needs of a growing construction market and the huge infrastructure projects ongoing in the UAE and the GCC," said Al Remeithi.
He said the company plans to increase its overall Emiratisation ratio to 34 per cent by 2020. At present, 21 per cent of the workforce is represented by UAE nationals.
Source: Khaleej Times