United Gulf Steel (UGS), strategically located in Jubail Industrial City, is the first world-scale medium-section rolling mill to be established in the GCC region.

Commercial production began in October 2000 with UGS applying state-of-the-art technology supplied by Simac of Italy. The mill is capable of rolling high-strength, micro-alloyed steel and medium carbon steel to international standards.

As a highly automated plant and one of the latest modern-generation flexi-mills, UGS is able to manufacture a wide range of medium sections with an ability to cut to various lengths and sizes meeting the most stringent ASTM A6M, Euronorms as well as JIS, DIN and BS standards.

This leading-edge technology has enabled UGS to produce already more than 250 different steel sections with outstanding dimensional accuracy to virtually any specification. The UGS steel mill has several advantages including a computer-controlled walking hearth furnace with flat roof burner, online reflex laser profile gauges, and automated piling, bundling and tying machines.

Production involves a system of planned and documented internal quality system audits and inspection that includes tensile, bend and hardness testing as well as micro-structural and chemical analysis.

UGS began commercial production at a time of widespread dumping in the region and has thus had to compete against predatory pricing against its product range that includes I-beams, angles, U-channels as well as flats, rounds and squares.

In spite of intensive competition from the Far East and Europe, UGS with its production quality, economies of scale, responsive and flexible production and rapid delivery is quickly carving its own substantial market share in Saudi Arabia by import substitution and regionally through increasing exports.

According to UGS' management, the plant has been operating 24 hours a day, six days a week to meet the increasing market demand.

UGS markets its products through a network of stockists. In Saudi Arabia, UGS has more than 20 dedicated stockists. The UGS approach is to establish partnerships with stockists through various steps that strengthen these relationships to their mutual advantage. At the same time, the UGS plant is able to respond quickly to the scope of product requirements - section types, sizes, thickness - from end-users.

UGS structural sections are also gaining acceptance for such critical applications as transmission towers and pre-fabricated building structures.

Steel prices in any economy are generally set by trends in the international markets. Accordingly this year, UGS introduced a new pricing structure that reflects movements in international prices. The company constantly monitors fluctuations in the international prices and responds appropriately with the best possible prices. As a result, UGS has a strong forward order book.

Not only is the number of profiles developed by UGS during the past two years of operations a record of sorts, it is also more creditable considering that the total output from the plant has continuously increased since start-up.

By locating in Jubail, UGS has a significant advantage over the imported sources of supplies in terms of shorter lead times. Against the lead time of up to three months for imports, UGS can deliver products to Kirby Building Systems in Kuwait, for example, in a matter of days, as UGS is literally a truck drive away.

A further advantage of its location would be for supplying sections for transmission towers. In the next few years, there will be major electrification upgrades in the Gulf region and new transmission lines to meet increased industrialisation, particularly in Saudi Arabia.

Currently, UGS sells about 85 per cent of its output within Saudi Arabia and the rest in GCC countries. But it is also looking to the Indian subcontinent and other regions for international sales opportunities.