Saudi firm plans new plant to gird Lebanon's economy
Al-tuwairqi group says factory will supply reinforcing bars for construction industry
By Michael Bluhm
Daily Star staff
Tuesday, May 08, 2007
BEIRUT: Saudi Arabia's Al-Tuwairqi
Group will announce plans next week to build a $300 million factory in Beirut producing steel reinforcing bars, company officials said Monday.
The proposed facility would employ around 350 people and produce about 500,000 tons a year of the bars, which are known as rebar and used for strengthening concrete used in construction, said Jassima al-Abbas, business development general manager at Al-Tuwairqi.
The project remains in the earliest stages, with Al-Tuwairqi still negotiating to buy the land and investigating infrastructure requirments. The company says it will reveal specifics for the project - including the identity of the Lebanese partner who has signed a memorandum of understanding with Al-Tuwairqi.
The firm wants to build the plant primarily to sell rebar to the Lebanese building market; the country imports all of its reinforcing bars, because the last domestic factory ceased operations a few years ago and moved to Jordan.
"We have to cover Lebanon," Abbas told The Daily Star. "The market is there."
Lebanese officials and industrialists welcomed the announcement, saying the construction sector should soak up the projected production.
"Fantastic - that's the best news I've heard for a long, long time," said Fadi Abboud
, president of the Lebanese Industrialists Association. "The market will absorb all the production of this factory. This I know for a fact. They're on the right track with that."
Even if the stagnant local economy fails to generate enough demand for the bars, Al-Tuwairqi should have no problem finding buyers in neighboring markets, said Pierre Doumet, general manager of cement-maker Cimenterie Nationale.
"It's good news, wonderful," Doumet said. "I'm all for it, as long as it's environmentally friendly. It would be nice to create some jobs. Let's have some people working for a change."
The factory, however, might face competition from domestic outfits which also see the opening for locally produced material - Doumet said two other projects to build rebar plants have reached the permit stage, while Al-Tuwairqi says it will not start building its factory until two years from now.
In the absence of any rebar manufacturer here, Lebanon brings in its rebar mostly from Egypt and Ukraine, said Fadi Boustani, senior civil engineer at the Contracting and Trading Company. A ton of rebar sells for about $850, meaning Al-Tuwairqi's intended annual capacity of 500,000 tons could fetch some $425 million.
Al-Tuwairqi, based in Dammam in Saudi Arabia's Eastern Province, recorded sales of about $5 billion last year, Abbas said. The company turned out more than 3 million tons of rebar at its facilities in Saudi Arabia, in addition to producing 1.5 million tons in Pakistan, 1 million tons in the United Kingdom and 300,000 tons in Dubai. New production facilities are slated for Egypt and Bahrain for Al-Tuwairqi, which got into the steel business in 1989 and employs some 2,700 people worldwide.
The firm's chairman spent Monday in Beirut negotiating the project, after he first leaked word of the factory during the recent Arab Economic Forum held here.
News of the project piqued the interest of the Investment Development Authority for Lebanon (IDAL), charged with attracting foreign investment to the country. IDAL, which first got wind of the proposed factory at last week's forum, has assigned an official to help Al-Tuwairqi steer the project to completion, said IDAL President Nabil Itani. Despite being in an embryonic stage of development, the project could send a sign to other potential investors that Lebanon remains a viable business location. "I think it's an opportunity to have very good PR for Lebanon," Itani said.