Tekno Tekno

The better the oil and gas industry is in the Middle East, the more promising the tubes and pipes industry will be.

News including that the oil producing countries in the Gulf region, by the year-end, will have spent approximately US$50 billion to increase their current oil field production capacities or to develop new discoveries has truly ignited the tubes and pipes industry in the GCC.

Main expansions to enhance the oil production capacity have taken place mainly in Saudi Arabia, the United Arab Emirates, Qatar, and Bahrain. The GCC commitment toward ensuring supplies of oil to the international markets calls upon them to make huge investment in developing and increasing production capacities.

The global manufacturing and transportation industry sectors offer as much effort as the producing and consuming countries in securing the sustainability of energy supply and contributing to improving fuel quality which in turn evolves the pipes and tubes industry in the region.

The tubes and pipes manufactures in the GCC looks at the regional market as one market and the big advantage of this market is the no customs barriers within the region.

The present demand of Gulf countries for pipes and tubes is met through imports from India, Turkey and a few other countries; however leading manufacturers of steel pipes and tubes in the Gulf region are looking into diminishing the external imports as much as possible through the production of millions of tonnes of tubes and pipes every year.

As far as pipes and tubes are concerned, the United States and Germany are large export markets for local manufactures which gained sizable market share and have the capacity to deliver pipes to specific customer requirements within a short time.

Moreover, new mills will commence commercial production by 2011 which will enable the local industry to enhance its production substantially from next year onwards.

The Gulf's steel industry is expected to see a large increase over the next decade, which will put it among the top steel producers in Asia.

The production of steel will help diversify the industrial base in GCC countries, where all the elements for this essential product to succeed are present.

This will boost the region's share of international steel. Industries in the region, which have relative advantages in the international markets, faced many challenges in the past, especially in the form of protection measures used in the European Union.

New investments in the Gulf's pipes, tubes and steel industries are expected to exceed by $20 billion between now and 2020.

Tekno/Tube 2011 calls the Gulf's tubes, pipes and steel industries to enhance cooperation in logistic operations, human resources development and boosting the competitive abilities of their products in the international markets.

This will give the GCC countries negotiating power with consumers. It will also help increase cooperation between GCC nations and help them avoid harmful competition, especially during times of crisis and low demand.

It will also form a defence line for the interests of producers of commodities. An example is Oil Petroleum Exporting Countries (OPEC) which played a prominent role in defending the interests of oil exporting countries and contributed to stabilising international oil markets since its establishment 50 years ago.

GCC countries can also establish groups for other basic products, such as petrochemicals and natural gas. The growth of these products is rapid and it’s becoming the basic pillar for Gulf economies seeking to diversify their production base.

The local steel market has been witnessing impressive growth due to the widespread availability of energy in the UAE to support the manufacturing of steel products.

The building blocks of the UAE's economic development are the significant core industrial and infrastructure sectors such as the steel industry.

With an annual consumption of five million tonnes of steel products, the industry has provided a steady supply to sustain the manufacturers of steel-based products across the Gulf Cooperation Council region, which had 1,725 factories in 2005 and attracted Dh24 billion ($6.5 billion) worth of investments.

The UAE has been a significant contributor to the overall development of the GCC's steel trade. The region has 45 working steel factories valued at Dh10.3 billion ($2.8 billion).

The UAE steel industry mirrors the country's strong growth in the economic and industrial sectors. The steel business involves large-scale imports of steel products from Turkey, China, Chinese Taipei, South Korea, Ukraine, Russia, India, Saudi Arabia and Iran.

Steel manufacturers in Arab countries are exerting efforts to integrate and consolidate their position in the face of a growing worldwide industry trend of mergers and acquisitions. There are 67 steel plants in the Arab region. The demand for steel is rising at five to six per cent every year. It is predicted that half of the world's steel production will be done in Arab countries by 2012 and Arab countries succeed in keep up with worldwide development in the steel industry.

Middle East witnessed the launch of a series of new tubes plants one of which is the Empower-Logstor Insulated Pipes Systems (ELIPS), the UAE's largest pre-insulated pipe manufacturing facility, in Jebel Ali.

ELIPS is a joint venture between Emirates Central Cooling Systems Corporation (EMPOWER), UAE’s leading district cooling company and LOGSTOR, the world's largest manufacturer of pre-insulated pipes.

These plants signify UAE’s drive towards diversification of economy in order to sustain growth.

These plants represent GCC’s success in bringing fresh investments. Further, it demonstrates local companies’ progressive outlook reflected in investing in new ventures, expanding existing facilities to provide full integrated solutions and producing raw material internally instead of importing it.

These facilities also ensure timely delivery and installation of pipe networks that have a major impact on projects’ timelines. They also control the prices by improving supply chain and eliminating artificial price fluctuations created by various players due to the demand-supply gap. 

As for the tubes industry, the GCC and Middle East are providing increasingly attractive markets for international tube manufacturers. Some of the growth sector includes oil and gas technology, petrochemicals, water and electricity supply, drainage as well as construction. Some of the big investments form the government as well as private sector have been made in this sector and some are already in the pipeline.

To sum up, the GCC nations will soon be transformed into a major player in international pipes, tubes and steel industry. This will help the region achieve one of the most important goals — diversifying their income sources.

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