Qatar Steel has delivered solid performance in preserving its market share in 2016 despite navigating turbulence in the global steel industry including cheap imports, supply surpluses, as well as domestic challenges arising from government budget cuts, and deferred infrastructure investments.
Budget deficits, an oversupply of steel globally, and client cutbacks have posed challenges in growing the business. Qatar Steel has met these challenges head on by improving efficiencies across the board, innovating its way to success, and ensuring it is the supplier of choice for the domestic market. Sales volumes have been stable and high-quality steel has proven time and again to be the preferred product of choice. Qatar Steel continues to work with loyal clients, including the state of Qatar, which has shown commendable resolve to continue financing major projects in the lead up to FIFA World Cup 2022.
Although Qatar Steel has maintained sales volumes, low global steel prices have resulted in 2016 revenues being less than past performance. Despite these challenges, the company was still able to post a profit, something that cannot be said of other regional steelmakers. Qatar Steel posted a higher profit for the first half of 2016, totalling $ 179 million (QAR 651 million), up 24.7% year over year. In 2016 Qatar Steel produced 1.8 million tons of rebar, which is actually 0.2 million tons more than the company’s original design capacity, due to the second rolling mill which achieved a record production of more than 1 million tons. Operational and cost efficiencies were another factor which contributed to positive financial results. Operational efficiencies also contributed positively to financial results inspite of high increases in power tariff to the tune of 12.5-25% over the past year