Al Qahtani plans steel pipe joint venture

15 Jun 2011

(MENAFN) Abdel hadi Abdullah Al Qahtani & Sons, Co (AHQ) plans to establish a joint venture (JV) company with USD106 million in capital with Panyu Chu Kong Steel Pipe Company Limited (PCKSP), a subsidiary of Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited’s, China’s largest longitudinal submerged arc welded pipe (LSAW) manufacturer, the Saudi Gazette reported.

The joint venture would manufacture and sell LSAW and Electric Resistance Welded (ERW) steel pipe. The company would set up a LSAW plant with an annual production capacity of 300,000 tons and an ERW plant with a capacity of 200,000 tons, the companies announced Monday.

Both PCKSP and AHQ would own 50 percent of the JV company and invest USD53 million in the company.

The company will benefit from decreased transportation costs at a time when increased infrastructure projects have led to growing demand for steel pipe, Chen Chang, chairman of Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited said. The joint venture company will increase the group’s production capacity and increase the company’s market share in Saudi Arabia and the region. The JV will be the first in the MENA region to provide LSAW steel pipe and will fill a large, previously empty niche, Chang said.

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