The Saudi Gazette reported that Saudi Arabia's domestic steel production will grow at a CAGR of around 14% to 2013 on the back of rising steel demand.
The report provides a detailed study of the steel industry outlook in Saudi Arabia till 2015. The report noted that the consumption of steel is anticipated to gain an uninterrupted momentum from the government backed massive infrastructure projects.
Government sources said that an estimated USD 400 billion investment will be spent on large infrastructure projects during the next 5 years. This will further boost the steel demand in the country and take iron and steel consumption to over 26 million tonnes by 2015.
The Kingdom has shown strong resilience against the economic slowdown, the report said. As a result, Saudi Arabia's steel industry is once again striving hard to achieve exponential growth trajectory and many steel manufacturers have started formulating capacity expansion strategies in response to the fast growing domestic demand.
Saudi Arabia is one of the most attractive destinations for the global crude steel producers. There are several reasons that prompt investors to capture the market, such as its geographical location equidistant from Africa, Europe and Asian countries, cheaper availability of labor compared to Europe and America and cheap & reliable energy & gas resources.
Furthermore, steel consumption in the Kingdom has been continuously soaring on the back of fast growing real estate and construction industry. Several infrastructure projects initiated during the past decade have boosted the steel demand in the country. Moreover, consumption of steel is anticipated to gain an uninterrupted momentum from the government backed massive infrastructure projects.
Saudi Arabia has led to the transformation in the GCC infrastructure scenario in recent years with plans to develop six economic cities and other major development schemes. Besides, the Kingdom has initiated massive large scale developments in its infrastructure, economical, industrial and educational projects to revamp the facilities and services provided in the country to enhance business opportunities.
The report noted that an analysis of the impact of economic slowdown on the real estate activities revealed that, of the total real estate projects mere 4% have been cancelled or delayed.
(Source: www.steelguru.com )