Every industry has its own players who compete with one another to gain a bigger share on its playground, and there are new entrants who try to find for themselves positions on the exporters playground.
Traditionally, a number of the Arab companies involved in the oil and gas field could occupy important positions among the top players in the field of this industry, in production and in export as well, but the emergence of these companies on the playgrounds of the top players constitutes a normal matter imposed by the being of the sector represented by these companies constitutes the base of the wealth in these countries and a larger domain for competition in the world market.
But this is not applicable to the case of a recently set up industry in the Arab countries, such as the iron and steel industry. Reaching the playground of the top players faces great challenges the least of which is the long – aged history of the major companies involved in the field of this industry and the ability of these companies to be a major player in the markets of this industry, too. And this is a new factor which has recently come into existence. The big mergers which created giant companies having a big production capacity enabling them to impose their control on the markets and direct prices the way which serves their interests can greatly control the production and marketing strategies on a large international scale.
In this world context where competition is very sharp the importance of emergence of national companies holding up the conception or character of «national champions» come to light. Some of these companies belong to the governmental sector and some others belong to the private sector which has come to hold a bigger share in the production of this industry at the Arab level. These companies could grow bigger in two directions : increasing their capability to provide the needs of their domestic markets and achieving some penetrations into the world market by directing a portion of their production to be exported.
In this context, the position of a number of the Arab steel producing companies can be viewed. Most of these companies are given the designation of «integrated companies» or «major companies» because they have managed to alleviate the factors of trust lacking and uncertainty imposed by dependence on the foreign markets, either in regard to prices or to the sustainability of being supplied with their needs of the steel products.
What cherishes the being of these companies to gain the character of «a national champion» is their competitive capability through entering the world export markets. Capability to export and occupying spaces, though limited, in these markets, is an evidence not only of the efficiency of the producing or exporting company but also their capability to grow and develop faster in the future. In this context, it is possible to consider the Libyan Iron and Steel Company as one of the Arab companies which, despite of its short lifetime which is still within the limits of 17 years, could take the role of the «national champion» in its sphere and to take the role of a player who cannot be ignored in the field of export to the world markets.
In spite of the fact that this company whose production volume of crude steel which amounted in 2006 a little bit more than 1.2 million tons did not provide the possibilty of listing its name among the largest 127 companies in the world the production capacity of each of which exceeded two million tons, this company aspires within the next few years to double its steel production as to reach 4 million tons per year, which will enable it to occupy a position among the top companies producing steel at the world level.
The list of the top world companies in 2006 included the names of only two Arab companies; they are Ezz – Dikheila which occupied the position 62 with a production figure amounting to 4,4 million tons of crude steel, and the Saudi Iron and Steel Company which occupied the rank 68 with a production figure amounting to 3.97 million tons, according to the list published by Metal Bulletin magazine which annually draws up a list covering the top steel producers at the world level. There are also some Arab companies recommended to enter into this list within the next years.
It would be worthwhile to refer to the contents of this list denoting that the largest steel company in the world is Arcelor-Mittal company the production of which amounted to 117 million tons, while the production of the company next to it, which is Nippon Steel, amounted to 33.70 million tons accounting for less than one third of the production of the first largest company in terms of production in the world. It is certain that the coming years will see new mergers making the number of the largest companies in terms of production increase at the same time when the number of the companies whose production will exceed two million tons will increase.
It would not be only achieving the figure of one million tons of finished products, which is the figure surpassed by the Libyan Iron and Steel Company for the second year consecutively which makes it deserve the title of a “national champion”, but also its direction of 60% of its production to the domestic market and its capability to enter into the exporters playground and penetrate a number of world markets, which made it during the past years exposed to dumping accusations the truth of which has not been established.
The company’s exports during the period 2001 – 2006 exceeded 5.2 million tons of finished and semi-finished products. The volume of its exports had also exceeded one million tons in 2006 whereby it had occupied the position of the second largest steel products exporting company at the Arab level next to Ezz – Dkheila in Egypt whose exports volume in 2006 amounted to 1.7 million tons of long and flat products.
In spite of the fact that the Libyan Iron and Steel Company had stopped its exports of reinforcing steel two years ago in order to satisfy the needs of the domestic market of this material the demand for which has been increasing during the past years, but the exports of the company have increased and become more diversified and widespread. In addition to some of the Arab neighbouring countries such as Egypt and Tunisia, its exports went to a number of the countries of Europe and Asia, which has put the name of Libya on the map of the steel and not only oil exporting countries.
This new image the features of which appear through one of the Arab steel producing companies in Libya stresses the fact that the steel companies in order to grow have to grow in their sphere and in their markets which are still unsaturated and require more steel products. It also stresses that the road to globalization passes through establishing the capability of the company to export its products to the world markets which are considered as a test for the extent of the capability for the real merger. And in spite of the importance of alliances and mergers as a way to reach larger markets, the companies do not grow only through alliances but also through proving their presence in their markets and through setting a growth strategy which is more sustainable and hold in its content the future orientations.