Metal Products - Business Overview
A building cluster in the newly developed urban area of Dubai, facing the longest expressway in UAE, the Sheikh Zayed Road.
It is said that any increase in iron demand serves as a barometer of future growth, since it is used in a wide range of industries, including infrastructure, construction, housing, automobiles, electrical appliances, etc. The United Arab Emirates is one nation experiencing rapid growth in iron demand.
Dubai, the second largest emirate among the seven emirates of the UAE, boasts a land area of 83,600 square kilometers (about a quarter of the size of Japan) and is located on the Persian Gulf coast. Its population has seen huge growth since the establishment of the Free Zone (Free Trade Zone) in 1981, which attracted a rush of foreign businesses keen to take advantage of the preferential taxation system and other favorable polices, thereby accelerating demand for housing. Numerous construction projects, including the Dubai Khalifa Tower, the world's highest skyscraper at 828 meters; the Palm Islands, man-made resort islands; various commercial facilities; and public buildings, have also spurred tremendous growth.
This rapid economic development has led to a steady increase in steel consumption in the UAE, from less than 2 million tons in the 1990s to almost 9 million tons in 2007. Though some projects were delayed or stopped in the wake of the global recession in 2008, the economy has now largely stabilized.
Sumitomo Corporation established Summit Steel Middle East (SSME) FZCO, a local operating company, in November 2005, to meet the demands of Dubai and other Middle Eastern nations, through a coil center business that covers procurement of iron and steel products to processing and sales of steel sheets, etc. as well as the trading business that deals with flat steel1, shaped steel2, steel pipes, etc.
1Flat steel generally refers to processed metal sheets with a thickness of six millimeters or less. It is widely used for automobiles, electrical appliances, general construction materials, beverage cans, etc.
2Shaped steel refers to steel pieces with a certain cross-sectional shape such as an "H" or "I." It is mainly used for civil engineering and construction pillars. Shaped steel with a circular hollow section is referred to as steel piping.
Coil center under construction, 2006. Located in the midst of the vast desert, infrastructure was developed at the same time.
SSME originally started out as a trader of iron and steel products. At that time, however, most manufacturing bases were located in Europe, Japan and other Asian countries and therefore it took almost four months from order to delivery. To improve this situation, SSME launched its coil center in the UAE in April 2007, based on a core business model that our Metal Products Business Unit is implementing worldwide.
The coil center stocks steel sheet coils for cutting and processing according to customer orders. It enables just-in-time delivery of customized products at any time and in any volume.
Not many Japanese manufacturing plants have started operation in the Middle East. Through its coil center and its trade in iron and steel products, Sumitomo Corporation has laid a foundation in the Middle East ahead of other Japanese companies.
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