Never in the past as it is today the steel companies have appeared as an influencing power in the economic life. What has increased the power of these companies is the fact that they are occupying an important and basic position in the current investment trends because a significant part of these investments is concentrating on setting up new steel projects or on expanding the existing mills.
What has corroborated the appearance of the companies as an economic power is the competitiveness which has become a fundamental criterion for the success of any company, especially with the increasing transition from the economies in which determination of prices was made under an administrative or governmental decision to the market economy where the prices are subject to the conditions of supply and demand and the capability of competition of each company.
These economic transformations have resulted in the appearance of many companies which may be described as companies which have an economic power and a strong presence in markets. The measure of the importance of a company has come to be not in the number of the workers it is employing, that is to say, not through its social role, but through its economic role which depends on basic criteria : volume of production, worker›s productivity and the company›s profitability and its capability to compete.
Within this perspective we may talk on Arab steel companies, great within their markets and geographical atmosphere, and more attention attracting, they are great in their ambitions. They do not satisfy themselves by stopping at the limits they have reached, but they always try to get greater by diversifying their products and boosting their production capacity until they become companies crossing the regional borders into internationalism.
The statistics of 2006 of the top one hundred companies in the world the production of each of which has exceeded two million tons reveal that there are only two Arab companies which have been listed among these one hundred companies. However, what the plans of these two companies reveal, in addition to other companies, of allocating considerable expansion investments, assert that these expansions of which the first half of 2007 has seen achievement of a part, will make a very important specific leap by these companies so that they will occupy advanced positions not only among the companies occupying the positions of the second half of the hundred companies at the world level as is their case now, but this will qualify them to occupy advanced positions among the first fifty companies which comprise the major steel producing companies at the world level.
What is witnessed by the Arab steel industry of concentration on investment in the important industrial sector gives the steel companies the leadership role in the industrial investment, or it may rather be said , in the production investment really contributing to creating an industrial production base supporting the economic growth and guaranteeing its continuity.
The cash surplus arising from the improved oil prices and the repatriation of the expatriating moneys has resulted in the availability of moneys looking for useful investment. A great portion of these moneys has gone to the estate investment, which, despite its positive advantages including encouraging setting up industries feeding this sector such as the iron and steel and cement industries, cannot be considered a productive investment. This justifies stressing the importance of channeling investment towards the productive industrial sectors the contribution of which to the Arab gross domestic product is still very limited. The contribution of the manufacturing industries to the gross domestic product does not exceed 10%, according to 2005 statistics.
Undoubtedly a significant change will occur to this percentage during the next years. Perhaps it would be sufficient just to make a quick look at what is being achieved of new projects and expansions under execution to prove the volume of the future changes. Also a quick reading of the headlines published in this issue of the magazine and taking some of them will confirm what we have of expectations:
- • Hadeed company›s production exceeded 2.4 million tons during the first half of 2007.
- Setting up the iron ore pellets mill in Bahrain with a production capacity of 6 million tons per year.
- Start-up of the bar mill in Qatar with a capacity of 700 thousand tons per year.
- A new mill in Algeria with a capacity of 1.5 million tons per year.
- A new mill in Beshay company in Egypt with a capacity of 1.7 million t of direct reduction iron per year.
- Mittal-Annaba in Algeria targets production of 2.5 million tons per year of steel in 2011.
These new millions of tons which will be produced through converting billions of the oil dollars into tons of steel and a wide variety of products confirm an important fact that the companies, whether affiliated to a governmental sector or to private companies, will drive the cart of the economic change and that increasing investment in the steel sector will contribute to creating larger companies which will have a role in creating a new steel environment which will lead and support the Arab economic development, giving these companies a stronger presence in a strong and competitive world market.