Japanese steelmaker Yamato Kogyo Co., Ltd. has agreed to sell its 49pct stake in Bahraini steel producer Sulb to joint venture partner Foulath, a Bahrain-based industrial holding company with significant steel investments across the region. The deal is valued at USD 140 mln, reflecting a USD 35 mln reduction from the initial estimate due to current market conditions.
The move marks Yamato Kogyo’s strategic withdrawal from the Middle East, following financial losses in the region and expected further impacts this fiscal year.
Sulb, the first fully integrated producer of medium and heavy beams and structural steel sections in the Middle East, was previously owned 51pct by Foulath and 49pct by Yamato Kogyo. It operates two rolling mills, one in Bahrain and another in Jubail, Saudi Arabia.
In Bahrain, Sulb runs a direct reduced iron plant, a melt shop, and a heavy & medium section rolling mill. Its Saudi facility, formerly known as UGS and rebranded as Saudi Sulb in 2011, features a continuous hot rolling mill, fed by steel billets from the Bahrain plant. Combined, the two sites have an annual production capacity of 1 mln tons of structural steel.