Economy, Domestic Economy

IMIDRO Co-Invests With Kuwait’s Unisteel

IMIDRO Co-Invests With Kuwait’s UnisteelIMIDRO Co-Invests With Kuwait’s Unisteel

After 21 months, a new rolling mill production unit, which was an Iranian –Kuwaiti joint venture, came on stream, officials familiar with the project said.  

The 77-million-euro project was built in Kuwait's main steel manufacturing firm, Unisteel. Iranian engineers helped the Arab neighbor to construct the unit in a bid to produce a wide range of steel sections – from 8 to 40 inches in diameter.

The unit has an annual capacity of 240,000 tons, a level upgradable to 400,000, IRNA reported on Saturday citing the officials.

The project, which increases Unisteel's nominal production capacity from 650,000 to 900,000 tons per annum, has created 165 new jobs, the officials said. It was inaugurated last week by Mehdi Karbasian, the head of the Iranian Mines and Mining Industries Development and Renovation (IMIDRO), which owns 49 percent of Kuwait's steel complex.

Unisteel has a 62 percent share of Kuwait's steel market.

In June 2014, Iran and Kuwait signed a memorandum of understanding (MoU) to establish a steel complex in Persian Gulf Mining and Metal Industries Special Zone (PGSEZ) on the Iranian territory.

Under the agreement, the two sides were to set up a direct reduced iron (DRI) facility in the complex with a 1.6 million ton capacity in the first phase. For the second phase the two agreed to establish a steel mill unit with a 1 million ton annual capacity; and for the third phase a rolling mill unit with a 1 million ton capacity as well as a pelletizing plant with a 5 million ton capacity.

IMIDRO has agreed to provide the land for construction of the steel production units and supply 100 million cubic feet of gas and 200 megawatt of electricity for the project. In return, the Kuwaiti side has undertaken to finance the project, through low-interest loans provided by Kuwaiti financial institutions, said Awad Al Khaledi, the chairman of Unisteel, as reported by IRNA.

The project that is to be covered by Foreign Investment Promotion and Protection Act (2002) will benefit from tax exemption and cheap customs services and raw materials.

Iran and Kuwait started a joint venture on steel industry back in 1996, when the two agreed to jointly set up the main Kuwait steel factory, which has three rolling production lines and a crude steel production line.