ADEN: A Yemeni industrial firm based in Aden’s free-trade zone plans to increase steel output by factor of 15 to 1.5 million tons in the next decade in the impoverished Arab nation, a senior executive said on Wednesday.
The Arab Iron and Steel Corp (AISCO) will spend $1.6 billion to turn a plant started in 2005 that now sells 100,000 tons domestically into a regional exporter that makes its own power, Managing Director Ravinder Singh said in an interview.
“This will be a qualitative and quantitative change in steel production,” Singh said, adding that the plant would use local liquefied natural gas (LNG) and import iron ore from India or South Africa instead of relying on local scrap.
Singh said a conventional fuel power plant on site will be expanded and supplied with fuel by tapping marginal gas fields that are not connected to a $4.5 billion LNG export operation in Yemen launched in October with the help of France’s Total.
“There are several small sources of gas available which are unviable to be connected to the main pipeline,” Singh said. “We propose to tap this gas, liquefy the gas, bring it to tankers in our factory here in Aden ... and use it to generate power.”
The firm, in which Saudi investors hold a minority stake, has bet on an economic recovery in Yemen, the poorest Arab country.
But Singh said he was undeterred and that part of the price tag for expansion included building 150 industry sheds near the plant to attract other firms.
“They don’t have to worry about licenses,” he said.
Funding for the expansion would come from the firm, banks, international institutions or investors which might join.
“We’re a very open-minded firm,” he said when asked whether other investors would join.
In Yemen, most industrial projects are at least partly funded by donors aiming to fight poverty by creating new jobs in a country that exports little apart from oil, gas and some foodstuffs such as salt or honey.
International institutions such as the World Bank had pledged $4.7 billion in 2006 to help Yemen battle poverty, but little money was used because of a lack of viable projects.
