United Steel, a success story amid challenging times
"Despite challenging market conditions, we have successfully grown our market share."
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Faisal Al Khaldi, Deputy CEO of United Steel Industrial Company (Kuwait Steel), talks to The Business Year (TBY) about the challenges the company faces, its ESG initiatives, and goals for 2025, including expanding its market share and introducing new technologies.
Kuwait Steel has been focused on expanding its local market share. How would you assess the progress of this strategy and the overall evolution over the past year?
Despite challenging market conditions, we have successfully grown our market share. A new local rebar producer has entered the market, helping reduce Kuwait’s reliance on international suppliers. With the existing GCC trade laws and agreements, anti-dumping duties cannot be applied to these imports, compelling us to adjust our pricing strategies to remain competitive, often at the expense of profit margins. Despite these circumstances, we remain committed to supporting the national workforce, achieving a 17 percent Kuwaitization rate. Our focus is on striking a balance between supporting government initiatives and advocating for policies that safeguard local industries, ensuring long-term growth and sustainability.
What are some challenges facing the sector?
The various challenges facing the industry include Kuwait’s regional geolocation, increases in supply chain costs, insurance, lead time, and inventory carrying costs. The Ministry’s decision in previous years to relax the 20 percent preferential pricing for local mill-origin rebars has increased the influx of low-cost imports from neighboring GCC countries, driven by regional surpluses. This has made Kuwait one of the most competitively priced rebar markets globally. Additionally, the delay in executing projects in Kuwait has affected our operations, and with restrictions on the export of rebars, we could not penetrate alternate markets. Resolving this imbalance is critical to safeguarding the sustainability and competitiveness of Kuwait’s steel industry.
What are your Environmental, Social, and Governance initiatives?
Environmental sustainability is integral to our operations. We recycle water, ensure zero harmful emissions, and repurpose byproducts for other industries. Our chimneys are linked to real-time monitoring systems with the EPA and the Ministry of Environment, ensuring transparency and compliance. Kuwait’s environmental policies are progressing and are very close to matching the regional leaders. We strive to set an example by demonstrating that sustainable practices can coexist with industrial success.
Are you incorporating new technologies like AI, robotics, and machine learning?
Absolutely, we are committed to digital transformation. Our vision is to implement Industry 4.0 by integrating digital technologies intelligently into manufacturing processes. For example, we are using the AMIGE-SMART Furnace in our steel melting facility for electrical and chemical modeling, and we are in the process of implementing the continuous billet welding process, which will increase the productivity of our rolling mills.
Robotics is being used across production facilities to handle heat-sensitive tasks. AI models are used for analyzing and controlling input materials to achieve consistent quality of the finished products according to international standards. We are using SAP, the best ERP available today, to handle our processes across the business. By using state-of-the-art technologies, we were able to enable our team to work remotely and become almost paperless during COVID-19. We are also using AI and ML tools to monitor our network 24/7 against cyber threats. Further, we are planning to maximize the use of cloud technologies for faster adoption of new innovations.
How do you view the new political landscape and its impact on the industry?
Under the visionary leadership of His Highness the Amir of Kuwait, Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, the government has shown a steadfast commitment to addressing growth and advancing reforms. This direction inspires optimism for the nation’s progress, as seen in key projects across Kuwaiti infrastructure, such as long-awaited projects and increased activities in the construction and oil and gas sectors. These strides, while encouraging, need consistent and transparent policies to ensure sustained momentum.
Kuwait Steel has the largest market share in Kuwait. Are you targeting any other markets?
We are fully geared to increase our market share with a competitive pricing strategy, penetration into all segments of consumption, engaging consultants, and offering enhanced services. While export restrictions have limited our international expansion, we are fully prepared to enter global markets once regulations allow. We faced many operational difficulties during the pandemic. However, during this challenging time, we maintained continuity in our operations, worked on enhancing our technological excellence, and supported our workforce, reflecting our unwavering commitment to the nation in both good and challenging times.
What are your main goals and objectives for 2025?
Our priorities include supporting Kuwait Vision 2035 and solidifying our role as a strategic partner in Kuwait’s development. We aim to play a key role in Kuwait’s development by contributing to major infrastructure initiatives. Key initiatives include integrating systems vertically across organizational functions to serve our existing operations. We are also committed to nurturing local talent to drive future growth. Through these initiatives, we hope to support Kuwait’s economic growth and ensure both the industries and Kuwait’s sustainable development.
Bio:
Faisal Al Khaldi is the Deputy CEO and board member of Kuwait Steel. He is a business administration graduate and started his career at Kuwait Steel 15 years ago, rising through the ranks before being appointed to his current position. He is considered a stalwart in the GCC steel fraternity.
