UAE. Etihad Rail, the master developer and operator of the UAE’s national railway network, and Emirates Steel, the largest integrated steel manufacturer in the UAE, announced today that they have signed a Memorandum of Understanding (MoU) to use rail as the primary method for steel transportation across the UAE.
The agreement is made at a time when the construction of the rail network is about to commence; this will represent a key step towards easing the transportation issues associated with the major flows of Emirates Steel’s products and raw materials. For Emirates Steel, the partnership will help the company meet the distribution needs of the growing demand for quality steel products from the region’s fast-developing economies.
The MoU was signed by Richard Bowker CBE, CEO of Etihad Rail, and Engineer Saeed Ghumran Al Romaithi, Acting CEO at Emirates Steel.
Expressing his delight to partner with Etihad Rail at this early stage in its development, Mr. Al Romaithi said: “We are one of the heaviest users of road haulage in the Emirates. Therefore, real environmental benefits will be realized by taking trucks off the road, easing road congestion and enhancing road safety.”
He described Emirates Steel as an environmentally conscious corporate citizen: “Protection of the environment is a key priority of Emirates Steel’s operations. Being a leader in the UAE steel industry, we are aware of our important role and responsibility for national processes of sustainable development. We strive for a reduced impact on the environment from our production and key logistics activities as well as aiming to provide a favorable living environment for the UAE community.”
Commenting on the new collaboration, Etihad Rail CEO Richard Bowker CBE, said: “Both Etihad Rail and Emirates Steel are playing an important role in the overall development of the UAE as well as in driving the country’s economic growth. We are honored to provide Emirates Steel with a more effective transport solution and look forward to working with them to further our goal of fostering economic development in the region.”
Etihad Rail Executive Director – Commercial Shadi Malak also added: “Our network will provide Emirates Steel with a modern, safe and sophisticated means of transport that is also environmentally sound and sustainable. Etihad Rail will enable an efficient, reliable, and feasible means to transfer incoming raw materials to the factory and their finished goods for export. The new agreement is truly a result of our joint efforts over the past year to implement the best operational solutions and processes, specifically designed to meet the needs of our new partner.”
By choosing rail as the primary method of transportation, Emirates Steel will be able to take advantage of the many benefits that the Etihad Rail network will offer – a faster, safer, more efficient, reliable and environmentally sustainable solution for transporting its raw materials inbound and finished goods outbound. By 2016, these raw materials and finished goods flows could reach an estimated annual volume of 12 million tonnes. By integrating rail in the transport process, considerable savings will be made.
Mr. Mubarak Al Khaili, VP of Commercial Strategy at Emirates Steel, said: “Commodities such as steel must be transported in bulk quantities; for which rail is the best solution, as costs are significantly lower, especially over long distances. The absence of a rail network means that our raw materials and finished goods are transported via road, causing significant constraints on transport volumes and distances. We believe that the railway will offer us increased flexibility and responsiveness, controlled lead times, and optimized costs.”
Abu Dhabi National Oil Company (ADNOC), Etihad Rail’s first customer, will soon use rail to transport granulated sulphur from sources in Shah and Habshan to Ruwais for export. Construction on Phase One of the project – a 266km route that will link these three cities in the Emirate’s Western Region – is expected to begin this summer, and is scheduled to be commercially operational in 2013.
When complete, the AED 40 billion Etihad Rail network will span 1,200km across the Emirates and will also form a vital part of the greater GCC network.
About Etihad Rail
Etihad Rail was established in June 2009 under Federal Law no. 2, with a mandate to manage the development, construction and operation of the UAE’s national freight and passenger railway network. The railway network will be built in phases to link the principal centers of population and industry of the UAE, as well as to form a vital part of the planned GCC railway network linking the six countries of the GCC.
Built to international standards, Etihad Rail’s state of the art network will act as a catalyst for economic growth and sustained social development. Once complete, the railway will redefine logistics and transport in the region, providing a modern, safe, efficient, sustainable network that will connect all regions of the UAE, and the UAE to its wider GCC neighbors.
About Emirates Steel
Emirates Steel is a direct subsidiary of Abu Dhabi Basic Industries Corporation (ADBIC) which is, in turn, wholly-owned by the General Holding Company (GHC). Strategically located in the Industrial City of Abu Dhabi (ICAD), some 35 kilometers away from the heart of the city of Abu Dhabi, Emirates Steel is the only integrated steel plant in the UAE, utilizing the latest rolling mill technology to produce reinforcing bar and wire rod.
Established in 2001, Emirates Steel is currently implementing a comprehensive business development plan. Once complete, the Company will be one of the largest and most competitive steel producers in the Gulf Cooperation Council (GCC) region.