Al Ittefaq Steel Products Company (ISPC) Market Research Report

Background

Company Overview

Al Ittefaq Steel Products Company (ISPC) is a leading steel manufacturer based in Dammam, Saudi Arabia. Established in 1989, ISPC has grown to become the largest privately owned steel rolling mill in the Kingdom, with an annual production capacity of 2.6 million tons.

Mission and Vision

ISPC's mission is to be the premier all-in-one steel source, delivering comprehensive solutions tailored to meet diverse customer needs across industries. The company envisions redefining excellence in the steel industry as the go-to partner for all steel sourcing needs, focusing on innovation, sustainability, and customer-centricity.

Primary Area of Focus and Industry Significance

ISPC specializes in the production of high-quality steel products, including reinforced steel bars, billets, and downstream premium steel products. The company plays a pivotal role in the construction and manufacturing sectors, supplying essential materials for infrastructure development and industrial applications. Its commitment to quality and innovation has established ISPC as a significant player in the Gulf Cooperation Council (GCC) steel industry.

Key Strategic Focus

Core Objectives

Quality Assurance: Ensuring all products meet both local and international standards, including those set by the Saudi Standards, Metrology and Quality Organization (SASO).

Innovation: Investing in state-of-the-art technologies and continuous research and development to enhance product offerings and manufacturing processes.

Customer Satisfaction: Providing timely delivery and exceptional customer service to build long-term relationships based on trust and mutual benefit.

Areas of Specialization

Steel Manufacturing: Producing a wide range of steel products, including deformed steel rebar, wire rod coils, and plain wire rods.

Steel Fabrication: Offering customized steel fabrication services to meet specific project requirements.

Steel Accessories and Hardware: Supplying essential construction and fabrication materials such as welding electrodes, surfacing tools, and paints.

Key Technologies Utilized

Thermex Bar Quenching Process: Employed in the production of high-strength reinforcement steel bars, ensuring superior quality and durability.

Electric Arc Furnaces and Continuous Casting Machines: Utilized in the production of billets and other steel products, enhancing efficiency and product quality.

Primary Markets and Conditions Targeted

ISPC primarily serves the construction and manufacturing sectors within Saudi Arabia and the GCC region, supplying materials for infrastructure projects, industrial operations, and agricultural sectors. The company also exports products to various international markets, including Egypt, Myanmar, and Hong Kong.

Financials and Funding

Funding History

ISPC has experienced significant growth since its acquisition in 1989, expanding its production capacity from 12,000 tons per annum to 2.6 million tons. The company has been privately funded, with ownership primarily held by the Al-Tuwairqi Group, which owns nearly 60% of the company's capital.

Recent Funding Rounds

In 2025, ISPC announced plans to list a portion of its shares on the Saudi Exchange (Tadawul), aiming to raise capital for further expansion and development. The subscription study and preparation for regulatory requirements were expected to last until 2023, with the offering potentially completed in the first quarter of 2024.

Notable Investors

The Al-Tuwairqi Group holds a majority stake in ISPC, with other investors including Jarir Marketing Co.

Intended Utilization of Capital

The capital raised from the IPO is intended to support ISPC's expansion plans, enhance production capabilities, and invest in research and development to maintain its competitive edge in the steel industry.

Pipeline Development

Key Pipeline Candidates

ISPC is focusing on expanding its product portfolio to include high-strength reinforcement steel bars, billets, and downstream premium steel products. The company is also exploring the development of new steel fabrication services to meet the evolving needs of the construction and manufacturing sectors.

Stages of Development

The company is in the planning and development stages for these new products and services, with implementation expected to commence following the successful completion of the IPO and subsequent capital infusion.

Target Conditions

The new products and services aim to address the growing demand for high-quality steel materials in large-scale infrastructure projects, industrial operations, and agricultural sectors within the GCC region and international markets.

Anticipated Milestones

Product Development: Completion of research and development phases for new steel products and fabrication services.

Market Launch: Introduction of new products and services to the market post-IPO.

Expansion: Establishment of additional production facilities to support increased capacity and product offerings.

Technological Platform and Innovation

Proprietary Technologies

Thermex Bar Quenching Process: A proprietary method used in the production of high-strength reinforcement steel bars, ensuring superior quality and durability.

Significant Scientific Methods

Quality Management System: Implementation of a comprehensive quality management system to ensure consistent product quality and compliance with international standards.

Research and Development: Continuous investment in R&D to innovate and improve manufacturing processes and product offerings.

Leadership Team

Key Executives

Hilal Al-Tuwairqi: Chairman of Al-Tuwairqi Group, the majority shareholder of ISPC.

Jassim Al Abbas: General Manager of Business Development, Sales, and Marketing at ISPC.

Professional Backgrounds and Contributions

Hilal Al-Tuwairqi: As Chairman, Al-Tuwairqi has been instrumental in ISPC's growth and expansion, overseeing strategic direction and major investments.

Jassim Al Abbas: Al Abbas has played a key role in driving business development and marketing strategies, contributing to the company's market expansion and customer engagement.

Competitor Profile

Market Insights and Dynamics

The steel manufacturing industry in the GCC region is characterized by significant competition, with several key players vying for market share. The demand for high-quality steel products is driven by large-scale infrastructure projects, industrial operations, and agricultural developments.

Competitor Analysis

Saudi Steel Pipe Company (SSP): A leading manufacturer of steel pipes and related products, serving the oil and gas, water, and construction sectors.

Al-Rajhi Steel: A major producer of steel products, including rebar and wire rod, catering to the construction and industrial sectors.

Qatar Steel: A prominent steel manufacturer in the GCC, producing a range of steel products for various industries.

Strategic Collaborations and Partnerships

ISPC has engaged in strategic collaborations to enhance its technological capabilities and market reach. For instance, the company partnered with geothermal cooling startup Strataphy to introduce geothermal-powered cooling solutions for its facilities, highlighting its commitment to sustainable and innovative technologies.

Operational Insights

ISPC's vertically integrated operations, encompassing billet production, steel fabrication, and downstream industries, provide a competitive advantage in terms of cost efficiency and product quality. The company's adherence to international standards and continuous investment in technology and human resources further strengthen its market position.

Strategic Opportunities and Future Directions

Strategic Roadmap

Expansion: Increase production capacity and product offerings to meet growing market demand.

Innovation: Invest in research and development to introduce new steel products and fabrication services.

Sustainability: Implement environmentally friendly practices and technologies to enhance sustainability.

Future Business Directions

ISPC aims to solidify its position as a leading steel manufacturer in the GCC region by expanding its product portfolio, enhancing operational efficiency, and exploring new markets. The planned IPO is a strategic move to raise capital for these initiatives.

Opportunities for Expansion

Geographic Expansion: Explore new international markets to increase export volumes.

Product Diversification: Develop new steel products and fabrication services to cater to diverse industry needs.

Technological Advancements: Adopt advanced manufacturing technologies to improve product quality and reduce costs.

Positioning for Future Objectives

ISPC's strong financial position, commitment to quality, and strategic initiatives position the company well to achieve its future objectives and maintain a competitive edge in the steel manufacturing industry.