Mohamed L. Lachgar
AISU’s Secretary General

The development witnessed by the Arab steel industry since the beginning of this decade is based on a new reality distinguished with high growth rates, reaching new production figures and dozens of new projects some which have come into the execution stage and some of others are accelerating paces in this direction. This new reality reflects a fact that :
Acceleration in achieving the objective of this industry is based not only on the desire to reach or the desire of being famous but also on the economic implication summed up in the fact that who will reach first will  get the largest share in achieving profit and the winners are the most capable to reach early.
It would be that what entails pleasure at the level of the Arab steel industry is that the production and consumption figures achieved during 2005 reflect achieving growth rates which constituted one of the biggest  three growth rates at the world level in the steel field.
The year 2006 will witness, according to the results of the operations of the Arab steel producing companies during the first half of this year, continued achievement of high growth rates which will increase the Arab steel production and also of a stronger presence not only at the level of the domestic markets but also at the level of the world steel market.
The main feature of the Arab steel industry arises not by the size of this industry which is still limited compared to the size of this industry at the world level which exceeded one billion tons, but the acceleration of its growth, which is expected to witness a big increase during the remaining years of the first decade of the 21st century. This will double the production capacities and the capability of this industry to be more responsive to the requirements of the domestic markets and   more able to integrate into the world steel market.
The past months of this year have seen coming of many expansions and new projects into production. What entails consideration with regard to the new projects is their coming into the production stage within the scheduled period, as is obviously seen from coming of a number of the Saudi Hadeed’s projects into the production stage during 2006 .
Commitment to the period of time scheduled for the execution of the projects means that a substantial change has taken place in the method of executing the industrial projects, as most often there was a delay in the execution of projects beyond the scheduled dates for executing them. They used to take a longer period of time than that scheduled already for them, which increases their cost and distorts the image of the steel industry, especially in respect of the economic feasibility  and return of investments in the field of this industry.
Maybe execution of the projects within their scheduled dates would not be the only or most important change taking place at the level of the steel industry in the Arab countries but there are also changes which are not less important and they lie in the rising operation rates. Most mills were running at less than their production capacity, making a major part of this capacity idle. This side has seen a substantial development during the last years. The average operation rate at the level of long products in the Arab companies reached 76%, and in some companies it exceeded 100%. This has made a number of companies, under the impact of the increasing demand, exceed their planned production capacity, which was  positively reflected on the profitability and  increased return under the impact of two factors : increasing operation rates and the improvement of steel prices at new levels, making the image of the steel industry look more attractive.
This new face of steel reflects a side of the changes seen by the Arab steel industry during the past years, but this image will be more strengthened by acceleration of setting up new steel  projects and expansions in most Arab countries to reach about 100  new projects and expansions. This will double the steel production capacities. It is expected, according to these new projects and expansions, that the crude steel production capacities  will reach 32 million tons in 2010 against 18 million tons in 2005, and this means achievement of a growth rate reaching 9.7% within the period 2005 – 2010.
This new image of the Arab steel industry motivates us to stress once again the importance that the «Arab Steel « should have a dependent and distinguished presence in the international statistics, especially that these statistics are still concentrating on particular designations like the Middle East and North Africa, while more than 90% of the Arab steel production is coming within the member states in the Arab Iron and Steel Union which comprises the Arab iron and steel companies, whether they are in North Africa or in the Middle East and are distributed, according to the conception of the Arab Iron and Steel Union, over three groups : Arabian Maghreb, Arabian Mashreq and Arabian Gulf.
No matter what the designations are, the Arab steel industry is rapidly growing, not only in the figures language but also in the language of the quality of their products and of their ability to integrate into the world market, which will give this industry a more important role in the future.