L.N. Mittal-led ArcelorMittal, the world's largest steel maker, is expanding its presence in the Middle East by acquiring a 60 percent stake in a Dubai-based steel distributor.
In a statement issued at its Luxembourg headquarters, ArcelorMittal said it intended to acquire 60 percent of the entire issued share capital of Dubai Steel Trading Co (DSTC) FZCO, a newly incorporated company located in the Dubai's Jebel Ali Free Zone.
"This is an important partnership that will spearhead our distribution network in the Middle East Area," Philippe Darmayan, chief executive of ArcelorMittal steel solutions and services unit, said in the statement.
The steel major said that, through this acquisition, it was widening its offering in the Middle Eastern area.
"DSTC FZCO will acquire the main business of a steel distributor in the United Arab Emirates (UAE), Dubai Steel Trading Company LLC (DSTC LLC)," the statement said.
Founded in 1986, DSTC LLC sells principally to the construction market, which represents more than 50 percent of its activity.
DSTC LLC distributes approximately 120,000 tonnes of products per year. In 2007,its revenues were about 70 million euros.
Its finance manager Chandresh Manair said that the company has its distribution network in the entire Gulf region.
"Our turnover is about 1 million dirhams ($272,000) a day. We are one of the largest structured steel inventory holders in the region," The National daily quoted him as saying.
DSTC operates out of two offices in Dubai and one in Abu Dhabi.
The Gulf Cooperation Council (GCC) countries - comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - is witnessing a major construction boom in the wake of a huge flush in petrodollars, which is attracting all global steel players to the region.