In a groundbreaking move, Aramco, Baosteel, and PIF have signed an agreement to establish the first integrated steel plate manufacturing complex in Saudi Arabia. The plan was announced in late January 2021 and is part of Saudi Arabia's commitment to enhancing its industrial capacity and reducing its reliance on oil revenue. The agreement was signed at Aramco's Dhahran headquarters by Amin H. Nasser, Aramco President & CEO, Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, Zou Jixin, Chairman of Baosteel, Mr. Chen Derong, Chairman of Baowu Group (the parent company of Baosteel), and Mr. Hu Wangming, President of Baowu Group.
The Integrated Steel Plate Manufacturing Complex
The integrated steel plate manufacturing plant will be located in Ras al-Khair Industrial City, adjacent to Jubail Industrial City on the east coast of Saudi Arabia, and will comprise a natural gas-based direct reduced iron (DRI) furnace, an electric arc furnace, a thick slab caster, and a plate mill, among other facilities. Once operational, the plant will produce 1.5 million tons of steel plates annually for use in various industries, including oil and gas, construction, and shipbuilding.
Significant Economic Impact
This project is a critical component of the Saudi Vision 2030 plan to diversify the country's economy and attract foreign investment. The plant is expected to generate around 6,000 direct and indirect employment opportunities, boosting the local economy and creating new job opportunities for Saudi nationals. Furthermore, the project will encourage the localization of the supply chain and downstream industries, thus reducing the reliance on imported steel products and boosting the competitiveness of the local manufacturing industry.
The Key Players
According to His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs, this project is one of several being undertaken in partnership with the private sector to support the diversification of the Saudi economy. The project's three key players, namely Saudi Aramco, Baosteel, and the Public Investment Fund (PIF), have been brought together by their shared commitment to driving innovation and advancing technological capabilities in the steel industry.
The Significance of this Agreement in the Global Steel Market
The agreement has broader implications for the global steel market. By establishing the first integrated steel plate manufacturing complex in the region, the project will provide a new source of high-quality steel plates to the Gulf Cooperation Council (GCC) region and beyond. Moreover, with the inclusion of Baosteel, one of China's largest steel producers, in the agreement, the project is expected to bolster economic ties between Saudi Arabia and China.
In conclusion, the establishment of the first integrated steel plate manufacturing complex in Saudi Arabia in partnership with Aramco, Baosteel, and PIF represents not only a major boost for the Saudi Arabian economy but also a significant milestone in the global steel industry. As the plant becomes operational, it will create thousands of new jobs and boost the competitiveness of the manufacturing industry, bringing the country closer to achieving its diversification goals.
In summary, the agreement signed by Aramco, Baosteel, and PIF to establish the first integrated steel plate manufacturing complex in Saudi Arabia is a significant milestone in the country's economic diversification journey. This project will make a significant contribution to creating new jobs, boosting the local economy, and reducing reliance on imported steel products. With the support of its esteemed partners, Aramco, Baosteel, and PIF are poised to establish a world-class, innovative manufacturing hub in the GCC region that will benefit the global steel market for generations to come.
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