Matar bin Awad Al Harithi, Govt Vice President for Minerals and Mining on the Nationwide Heart for Industrial Improvement
Engineer Matar bin Awad Al Harithi, Govt Vice President of Metals and Mining on the Nationwide Heart for Industrial Improvement, stated that expectations have been revised in regards to the rise in home demand for metal from 17 million tons to 24 million tons by 2035, supported by the growth of renewable power initiatives, a rise in transformative industrial sector investments, and big nationwide initiatives.
Al Harithi pointed to the shift in demand dynamics after the nationwide plan that started in 2019, indicating that whereas expectations indicated that home demand for metal in 2024 wouldn’t exceed 12.4 million tons, actuality proved fully in any other case, as precise demand reached 16.2 million tons, a rise of greater than 30% over the unique estimates.
Al-Harithi defined throughout a dialogue session on the sidelines of the Third Saudi Iron and Metal Convention, in Riyadh, that this sudden development was not pushed solely by authorities initiatives, however was a pure results of a structural transformation within the Saudi financial system, as non-oil industries started to play a larger position in stimulating development.
Al-Harithi identified the separation of the normal relationship between oil costs and iron consumption, which started in 2020 when demand rose considerably whereas oil costs additionally declined considerably, which signifies the expansion of a extra diversified financial system and fewer depending on conventional elements.
He defined that the rise in demand for surfaces, and the range of imported merchandise, displays the expansion of latest sectors akin to the auto trade, renewable power, and sensible constructing initiatives, which require extra advanced and specialised metallic merchandise.
He revealed the transformations witnessed by the iron sector within the Kingdom in recent times, stressing that the sector was not solely in want of formal enhancements, however moderately a complete structural “reformulation” commensurate with the targets of the Kingdom’s Imaginative and prescient 2030, noting that the sector went by means of a monetary disaster with losses amounting to six billion riyals, and corporations’ revenue margins and market shares declined, which required the existence of a nationwide plan able to coping with the present challenges with flexibility at will. Lengthy and medium time period and began in 2019.
He defined that the sector earlier than 2019 was affected by a widening hole between provide and demand, amassed losses, declining charges of utilization of manufacturing capability, and nearly full dependence on low-value-added merchandise at a fee of 79% of the amount of native capability.
He added that with the rise in imports and the absence of superior merchandise akin to flat metal and specialised lengthy merchandise, it appeared clear that the sector was on its strategy to shedding its competitiveness internally and externally, however what distinguished that stage was the daring choice taken to rework the businesses’ scattered calls for right into a complete plan to restructure the sector, primarily based on correct knowledge and in-depth research, and never on instant reactions.
Al-Harithi stated that with this strategy, the options of a nationwide technique started to take form, specializing in enhancing industrial integration, elevating working effectivity, increasing the product basket, and attaining truthful competitors, whereas guaranteeing the safety of provide chains. He identified that the independence of “Hadeed” from SABIC was the “cornerstone” of the plan, as the corporate is now ready to rework right into a nationwide entity able to increasing and getting into into… Extra advanced manufacturing areas with larger financial returns.
Al-Harithi continued: The transformation was not solely organizational, however included the funding scene as a complete, as industrial investments exceeding 30 billion riyals had been attracted, and main strategic partnerships had been established, most notably the “Bab Al-Khair” firm between Aramco, the Chinese language firm Bausteel, and the Public Funding Fund, to provide heavy plates used within the ship and power trade.
The plan additionally included unifying seamless pipe corporations to extend operational effectivity, and restarting main corporations that had stopped manufacturing, after addressing the essential causes of their failure.
He pointed to the persistence of various challenges, together with the weak availability of scrap and its excessive prices, particularly with the growing dependence of small factories on it, which now devour roughly 60% of the whole native demand for scrap, the persevering with gaps within the qualification of nationwide cadres, and the inefficiency of some manufacturing strains, along with different challenges associated to the acceleration of imports, which in 2024 reached about 6 million tons of assorted merchandise, A few of them are getting into the native marketplace for the primary time.
When requested in regards to the future outlook, Al-Harthy said that the objective is to shift from merely “attaining sufficiency” to “attaining management,” because the objective is now not simply to fulfill demand, however moderately to develop new manufacturing industries primarily based on merchandise with excessive added worth.
He said that work has begun on superior initiatives to attain this objective, together with an built-in mission for the manufacturing of flat metal with a capability of greater than 4 million tons, a mission for heavy sections and locomotive rail metal, and a mission for the manufacturing of high-performance lengthy iron merchandise, along with a strategic mission for pelletizing iron ore, to reinforce the safety of provides.
He identified the necessity to expedite work on establishing a nationwide firm to import scrap to fulfill the growing demand for uncooked supplies on account of the growth of manufacturing, the dearth of scrap within the Saudi market, its excessive prices, and its low high quality.
