JIZAN, 5 November 2006 — Custodian of the Two Holy Mosques King Abdullah yesterday laid the corner stone for the first phase of a new South Steel Factory in Jizan, which is owned by Trans Kingdom for Investment company (TKI) with an annual production capacity exceeding one million tons of steel ingots and bars.

The total cost of the first phase is about SR1 billion. The TKI will soon start civil works at the project that covers an area of one million square meters and is designed with the most modern international specifications.

The factory will meet the steel needs of the entire southern region and its excess production will be exported to nearby countries including Yemen, which is just around 140 km away, and African countries including Djibouti, Eritrea and Ethiopia.

The first phase is considered to be part of a series of many stages with investments expected to exceed SR3 billion. Currently, the company is negotiating with a number of international strategic partners to participate in various stages of the project. A partner is expected to be selected in due course. The factory is expected to positively impact the national economy as much as the Jizan area.

The company is establishing a ‘Training center’ to train more than 400 workers from the area in technology and administration. It earlier signed a contract with Corus Consulting, which is part of the Corus Group, a giant European entity, for the preparation of engineering designs and documents required for the import of specialized equipment for iron ore processing in Jizan.

This factory will cover the needs of the entire southern region of the Kingdom and export its excess production to Yemen and African countries.

This is considered to be one of the biggest in the private sector in the area and will have a positive impact on Jizan’s investment program and help create job opportunities locally.

TKI Chairman Sulaiman Al-Harbi thanked King Abdullah and Crown Prince Sultan for participating in the cornerstone ceremony of the project.

“The project will now immediately go into operation,” Al-Harbi said.

The facilities made available in Jizan by the Kingdom and especially by the Jizan Governorate is the reason why the area was chosen for the project. Increasing demand for steel in the area coincides with the ongoing urban development in the region and also elsewhere in the Kingdom.

He pointed out that iron products were being continually developed to meet the demand and this had entailed the company to direct its investment to this sector. The other reason is that the Kingdom like the rest of the Gulf is witnessing a construction boom. The construction activity covers new development projects and residential buildings, as well as expansion of the existing factories and projects, both across the Kingdom and the GCC.

Demand for steel will continue to increase in the area and by 2008 will witness a huge increase.

“There’s is no doubt, that after the Kingdom joined the WTO, we’re facing many challenges and we must meet them with projects that the country needs,” he said.

TKI Executive President Saud Al-Oraify said: “King Abdullah laying the corner stone is a great honor for the company. “This project has come about after conducting many field studies that show the market needs. This has encouraged many new factories to be established. In the next three years, these companies will be able to meet the local needs completely.”

Mohamed Al-Darjam, general manager of the company, said that this project was a giant one and steel production is one of the yardsticks that measures a country’s development growth.

“Demand for iron is huge in the area. There are so many projects in the Kingdom that have been approved and they all need huge quantities of iron for building their infrastructure. I expect that the Kingdom will become a major producer of iron in the area in the near future,” he added.