Dubai-based conglomerate Emarat Dzayer Group has formed a joint venture in Algeria to set up Dhs5.87bn ($1.6bn) steel plant in the country, it announced on Wednesday.
The JV – called Emarat Dzayer Steel Company – has been formed in partnership with Groupe Imetal, an Algerian government-owned company.
Groupe Imetal will hold a 51 per cent stake in the JV through its two subsidiaries – Naftal (41 per cent) and Asimdal (10 per cent) – and the rest 49 per cent will be held by Emarat Dzayer Group.
The new plant, to be located in Algeria's Annaba province, will produce 1.5 million tonnes per year of directly reduced iron (DRI) and 1 million tonnes of steel in the form of rails, steel structures and seamless pipes.
Technology for the operation will be sourced from countries such as Germany, Italy, the US and Japan, a statement said.
The plant is hoped to create jobs for the local population, generate and save foreign exchange reserve, and support economic growth.
Ahmed Yazid Touati, chairman and CEO of Groupe Imetal, said: "I strongly feel that this value-added steel plant will be self-sufficient to meet the local demand and help our national economy."
The two companies have also signed a second agreement for oil distribution with Naftal – a state-owned company for oil distribution, and Asmidal – a government-owned manufacturing company for petrochemicals.
The joint venture will set up manufacturing, blending and packaging facilities for lubricants and industrial lube oils catering to the auto, aviation, marine and industrial sectors.
The project will be first of its kind in Algeria and will also export products to the Middle East and North Africa region, the statement said.
Ahmed Hasan Abdul Qaher Al Sheebani, chairman of Emarat Dzayer Group, said: "Algeria is abundant in natural resources, energy and market whereas the UAE has knowledge and technological skills. Therefore, they are natural partners to develop the industrial sector as a whole for mutual interest."
Bilateral trade between Algeria and the UAE stood at Dhs3.6bn in 2015 and the UAE's investments in Algeria amounted to more than $9bn.
Abdesselam Bouchouareb, Algerian Minister of Industry and Mines, said that the country is seeking to more than double investments from the UAE to around $20bn in the 'medium term'.