News Room - Business/Economics

Posted on 10 Aug 2023

Saudi wealth fund PIF eyes rebar mill acquisition

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is mulling acquiring a stake in a major Saudi steelmaker.

PIF is in talks with a Riyadh-based rebar producer, a tier-two mill, to buy into the company and retain the existing management to run the business, Kallanish learns from steel market and finance sector sources.

The steelmaker has a 350,000 tonnes/year rebar mill at the site in Riyadh and an electric arc furnace billet plant with 850,000 t/y capacity on the west coast.

Saudi Arabia’s giga projects are split between those directly owned and financed by PIF from its $500 billion worth of assets and those owned and funded by the government through public entities. PIF plans to invest $1 trillion by 2025.

Large amounts of rebar will be required for the projects, and PIF is eyeing supply from its directly or indirectly owned entities.

"In my opinion, it will be a wrong decision. Government-owned entities should not be involved in production. Steel production is not easy and private entities should run it. We heard even last December that a Dammam-based mill was in talks with the PIF, but did not go forward," a senior mill official comments.

The Public Investment Fund did not respond to request for comment by Wednesday deadline.

Source:Kallanish