Structural Steel Mill Upgrade Feasibility Study, Focusing in KSA and UAE

• The sections demand in the Saudi Arabia is expected to grow at a healthy growth rate of 15% between 2022 and 2034. The demand is primarily driven by Giga projects developments
• Each module of “The Line” measures 800 meters in length and 500 meters in height. The estimated Jumbo steel needed for each module ranges from approximately 1.75 million tons. A total of 135 modules are to be constructed as part of “The Line” project
• Around 30% of the steel utilized in Saudi Arabia is expected to be high specific weight steel, with a weight exceeding 500 kg/m
• High specific weight (HSW) steel is a more sustainable material choice than traditional steel. It can save material, energy, and resources, and it can help to reduce greenhouse gas emissions
• In 2022, the overall market for steel sections in the GCC region reached a total of 1,596 thousand tons. Saudi Arabia emerged as the dominant market, representing 58% of the total sales, while the UAE followed closely, accounting for 32% of the sales

Table of Content:

Market Assessment

• Understanding the Client’s objectives:
  • Obtain a detailed briefing from the Client on the envisaged study;
  • Identify key stakeholders in the Project
  • Have a clear view of the Client’s expectations; and
  • Develop the project charter, which outlines the dates, tasks and responsibilities of GRC team members as well the Client responsibilities.
• Macroeconomic and construction market analysis (UAE, KSA)
  • Economic growth analysis on KSA, UAE
  • Population and employment growth;
  • Urbanization rate and outlook;
  • Construction market overview; and
  • Key drivers of construction sector
• Jumbo steel beam demand analysis (volume and value)
  • Demand by country
    • KSA;
    • UAE;
  • Demand by segment
    • Commercial;
    • Industrial; and
  • Supply analysis
    • Key manufacturers of Jumbo Steel Beams by country – KSA, UAE
    • Total domestic production capacity; and
    • Share of imports (if any) and key partners (countries) for trade
  • Market trend analysis
    • Key demand drivers;
    • Market restraints; and
    • Operational, product, and customer trends.
  • Competitive landscape (UAE & KSA)
    • Market share analysis;
      • Market concentration level;
    • Company profile for top 3 manufacturers;
      • Overview;
      • Plant location;
      • Production capacity; and
      • Financials (if available).
    • Pricing analysis (KSA, UAE)
      • Pricing strategies of key players in the sector;
      • Pricing trend analysis; and
      • Key factors impacting the pricing.
    • Profitability analysis
      • Gross and EBIT margin of the industry;
      • Margin trends; and
      • Factors impacting the margins.

Technical Assessment

• Technical Analysis: *
  • Pre-operating expenses;
  • Initial and ongoing CAPEX requirements;
  • Review of post-operational OPEX;
  • Broader supply chain capabilities (e.g. raw materials procurement, warehouse, logistics)
  • Understanding of regulatory requirements (process, cost, and timeline of obtaining approvals);
  • Benefits of pre-existing facilities (if applicable);
  • Manufacturing/office Facility details (incl. a high high-level proposed plot layout, plot/land area, building area in sqm);
  • Plant, equipment, and machinery details (e.g. provide name & type of equipment, number of units and price per unit);
  • Detailed schedule (list, quantity, price) of capital investments e.g. equipment, machinery, etc.;
  • Sourcing of assets (e.g. name of supplier, country of origin, name of brand, etc.);
  • Phasing / deployment of assets;
  • IP/technology used to provide the service;
  • Details of the output – product description, quantity, adherence to standards, etc.;
  • Capacity utilization and assumptions over the period of financial projections;
  • Details of inputs into the manufacturing/service process e.g. raw material description, quantities & unit costs;
  • Details of all the conversion requirements (e. g. identify the utilities required for the proposed Project, utilities consumption rates and quantities); and
  • Standards/certifications/accreditations–ISO, equipment maintenance, etc.

Financial Analysis

• Assess revenue assumptions with the Client based on the market research.
• Based on discussion with the Client, we will:
  • Identify the sources of revenue and finalize revenue assumptions;
  • Identify assumptions related to the cost of sales and operating expenses; and
  • Finalize the assumptions for working capital requirements.
• Agree with the Client on the capital structure and financing tools to be incorporated into the financial projections;
• Provide non-technical inputs in the development of assumptions underlying the Project;
• Build financial projections for a period of up to 10 years. This will include P&L statement, cash flows statement, and balance sheet;
• Document the Project evaluation indicators that will be generated based on the financial projections, including internal rate of return and the payback period;
• Compute appropriate KPIs / profitability ratios such as ROA, ROE, margins etc.;
• Analyze the results of the financial projections and discuss modifications in assumptions with the Client, as appropriate.

Opportunity Assessment

• Critical success factor and risks to entry;
• Differentiating and marketing strategies;
• Recommended business model; and
• Marketing strategy.