Emirates Steel agrees MoU with Etihad Rail
Sunday, 07 August 2011 05:59
Emirates Steel, the largest integrated steel manufacturer in the UAE, signed a Memorandum of Understanding (MoU) with Etihad Rail to use rail as the primary method for steel transportation across the UAE.
The agreement represents 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.
Mr. Al Romaithi said: “We are one of the heaviest users of road haulage in the Emirates. Therefore, real environmental benefits will be realised by taking trucks off the road, easing road congestion and enhancing road safety.”
Commenting on the new collaboration, Etihad Rail CEO Richard Bowker CBE, said: “. 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.”
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 12mn 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.