Riyadh Steel plans to build new plant: CEO

Logo of Riyadh Steel Co.

Riyadh Steel Co. plans to build a new plant near Riyadh to expand its product portfolio, CEO Ahmed Abdelkareem told Argaam.  

Steel regional consumption is forecast to grow 3.3% annually until 2026, as the region’s steel-consuming projects are estimated at nearly $2.3 trillion, he added.

Riyadh Steel enjoys a robust financial position with a clean balance sheet, except for a loan secured by the Saudi Industrial Development Fund (SIDF).

The below is the details of the interview:

Q: Would you initially give us a brief on the company, its product portfolio, and the targeted sectors?

A: Established over 23 years ago, Riyadh Steel is one of the Kingdom’s leading steel manufacturers. It provides sheared scrap, billets, and ASTM A36 standard flat and angle bars in several sizes (30–100 mm).

Q: What is the number of production lines and the annual production capacity?

A: Riyadh Steel has an integrated supply chain that begins with the purchase of scrap, then shears it, melts it, and rolls it to produce bars. Its annual bar production capacity is 90,000 tons, billet production capacity is 150,000 tons, and processed scrap production capacity is 220,000 tons.

Q: What do you anticipate will be the size of demand for your company’s products in Saudi Arabia over the coming period?

A: According to statistics published at the second Saudi International Iron and Steel Conference 2022, regional steel consumption is projected to grow by 3.3% per year until 2026. The value of steel-consuming projects in the Middle East and North Africa region is estimated at $2.3 trillion, mainly mega-government projects.

This coincided with the usual growth of the Kingdom’s consumption levels due to the recently witnessed urban development. Saudi Arabia is forecast to increase its dependence on the gross domestic product (GDP) to fulfill the growing demand for steel from 67% in 2019 to 99.3% by 2030.

Q: Where does the majority of the company's sales occur? And are you planning to enter new markets over the coming period?

A: The company concentrates sales in Saudi Arabia and exports products to some Arab countries. We are set to enter any markets where we can add value to our company.

Q: Do you plan to introduce new products or boost production over the coming period?

A: We are planning to build a new plant near Riyadh to expand and diversify our product portfolio in line with the clientele’s aspirations.

Q: What are the main goals of offering Riyadh Steel shares on the Nomu-Parallel Market?

A: The company is looking forward to capitalizing on the growth opportunities available for the listed companies, as they may capture financing instruments that may help achieve a company’s expansionary plans. In addition, the company will be able to add sustainable value to all relevant parties.

Q: How can the company be distinguished among peers?

A: Riyadh Steel has a robust financial position, with a clean balance sheet except for a loan from the SIDF. The cash flows reflect the company’s efficient business activities, and we have an agile, integrated work team that works perfectly to capitalize on possibilities swiftly and efficiently.