As the Gulf Cooperation Council (GCC) member states - comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - as well as the other neighboring countries witness a major construction boom in the wake of a huge flush in petrodollars which is attracting all global steel players to the region, Saudi Arabia's Construction Products Holding Company (CPC) and Arabian Roots Company formed Roots Steel to produce pre-engineered steel building structures in Syria, Egypt and the United Arab Emirates. Under the agreement, which is a part of CPC's continuous national, regional and international expansion plan, it will have 70 percent controlling stake in Roots Steel that will build three factories in Damascus, Cairo and Abu Dhabi at a total investment of SR240 million ($80 million) or around $27 million per factory. Arabian Roots holds the remaining 30 percent. In a press conference held at the Jeddah Le Meridien Hotel on Tuesday, Dr. Faysal Alaquil, CPC's director for Business Development and Administration Affairs, said the three factories are envisioned to have a total production capacity of 360,000 tons per year or 120,000 tons per factory three years after their initial operations. As planned, the factory in Damascus will start production in November this year, whereas the ones in Cairo and Abu Dhabi will be operational in February 2009 and March 2009, respectively. Initially, each factory will have a production capacity of 80,000 tons per year, for a combined output of 240,000 tons annually. The plants will produce all types of pre-engineered steel building, all types of steel structures, I-beams and columns plus corrugated sheets. The formation of Roots Steel is in line with CPC's mission to target the markets of Saudi Arabia, Europe, other Middle Eastern countries, Southeast Asia and the United States, Dr. Alaquil further said. “CPC has the Middle East's highest standard in the field of contracting and construction. Our business vision and philosophy is to serve as a catalyst for a one-stop-shop outlet providing all the needs of modern construction,” he pointed out. Arabian Roots, founded in 1981, is a leading wholesaler, manufacturer, retailer and special service provider in the Saudi market, focusing on building materials, including among other things, metal works, fences, doors, railings, grids, false ceiling supports, adhesives, paints, coatings, waterproofing membranes, power tools, electric generators, and mobile cranes. Eng. Ousama Fansa, CEO of Arabia Roots, said Roots Steel would greatly benefit from his company's well-developed regional distribution and marketing network and outlets that cover the GCC, the MENA region (with Egypt, Syria and Lebanon), and a presence in Malaysia. “Arabian Roots is fast extending its footprint in the Middle East,” Fansa said. “Sales figures have touched the SR900 million mark.” Fansa moreover said Roots Steel would compliment the existing building materials the company produces and distributes, adding that Roots Steel “has great potentials due to our presence in nearly every city in the region.” CPC offers complete turnkey projects covering engineering, construction, and contracting. Its expertise is available as turnkey contractor, joint venture partner or main sub-contractor. Noting the upswing in the Kingdom's construction industry despite rising prices of commodities, Alaquil suggested that small establishments should merge to be able to compete with big companies. He said “it is extremely important (for them) to have a collective purchasing power” under the current environment. He argued that the continuous upsurge in construction activities necessitates growth in the number of factories providing the needed materials, otherwise prices of these products would go haywire. “It's really a huge market,” he added. CPC started its activities less than three years ago with seven companies. After the implementation of the company's plans in addition to strong success indicators, CPC expanded to the neighboring markets Syria, Egypt and UAE. CPC's upcoming plans are to enter into Algerian, Moroccan and Indian markets. In the Kingdom, it will put up another state-of-the-art factory in Dammam by the end of this year. Today, CPC owns 15 companies, 14 of which are producing construction materials and the other one is a transportation company. __
