RAK Steel's output hit by power shortages
Monday saw the RAK Steel group's chief executive specifying that due to the power shortage in the UAE, the company has been compelled to decrease its production by
Ras Al Khaimah's industrial sector of the UAE's northern emirate is troubled with the shortages of power as growth outpaces supply, thereby resulting in continuous outages.
Ajay Aggarwal, CEO of RAK Steel, a joint venture with sovereign wealth fund Ras Al Khaimah Investment Authority (RAKIA), said: "We currently produce 30,000 tonnes of steel per month which is around 15 percent less than what we can produce if we had sufficient power supply."
An announcement was made in February by RAK Minerals & Metals Investments regarding another RAK government investment fund, in order to produce more power for the emirate and to spend $1 billion to develop a rail link and a terminal for importing coal from Indonesia.
Aggarwal, in a phone interview, said: "I believe things will improve and our production will be higher once the entire power situation is addressed."
Aggarwal further added that by the end of the year, RAK Steel plans to raise the annual capacity of its rolling mill to 750,000 tonnes from 500,000 tonnes, to meet the strong domestic demand.
"The capacity to produce 750,000 tonnes will be ready the last quarter of this year or early 2010, but we will actually start producing at full capacity in about a year's time." Aggarwal explained that the plans to begin manufacturing steel billets stay unsure though.
He added: "The market conditions are not very stable right now... that's why we are still not certain about the time frame. But I would say it will take 3-4 years time to be complete."
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