SeAH Changwon Special Steel Breaks Ground on Saudi Stainless Steel Seamless Pipe Plant

$230 Million Investment
Completion Scheduled for First Half of 2025
Expansion of Business in Middle East Market

[Asia Economy Reporter Choi Seoyoon] SeAH Changwon Special Steel recently announced on the 2nd that it held a groundbreaking ceremony for a stainless seamless steel pipe factory in Saudi Arabia. To establish the factory, it formed a joint venture called ‘SeAH Gulf Special Steel Industries (hereinafter SGSI)’ last year with Saudi Aramco, the world's largest oil company.

Stainless seamless steel pipes differ from ordinary steel pipes in that they have no seams and feature excellent pressure resistance and corrosion resistance, making them high value-added products used in energy, refining, and chemical applications. Due to high technological barriers, only some advanced steel-producing countries can manufacture them.

The groundbreaking ceremony held the day before was attended by SeAH Holdings Vice Chairman Park Euisook, President Lee Taeseong, SeAH Besteel Holdings CEO Yang Youngjoo, SeAH Changwon Special Steel CEO Lee Sangeun, Aramco Vice President Al Huraishi, Saudi Industrial Investment Company (Dussur) CEO Al Rayyes, SPARK CEO Al Qatani, Ambassador to Saudi Arabia Park Junyong, and about 70 key officials from SGSI and the government.

Since establishing the joint venture SGSI with Aramco in July last year, SeAH Changwon Special Steel has been securing land and carrying out various preparations for the first local stainless seamless steel pipe factory. The SGSI factory will be built on a 177,851㎡ (3,800 pyeong) site within the ‘King Salman Energy Park,’ which Aramco is developing as an energy industry hub in Riyadh, the capital of Saudi Arabia. To this end, the two companies will invest $230 million (approximately 290 billion KRW). Stainless seamless steel pipes and tubes with an annual production capacity of 20,000 tons are expected to be produced starting from the first half of 2025.

Key stakeholders who participated in the groundbreaking ceremony of the Saudi stainless seamless steel pipe factory of 'SGSI,' a joint venture between SeAH Changwon Integrated Special Steel and Aramco, are taking a commemorative photo together. (From left) Kim Young-soon, Head of SGSI; Park Eui-sook, Vice Chairman of SeAH Holdings; Al Hadeed, Chairman of SENDAN; Park Jun-yong, Ambassador to Saudi Arabia; Al Huraishi, Vice President of Aramco; Lee Tae-sung, President of SeAH Holdings; Al Habib, CEO of Aramco Korea; Al Reyes, CEO of the Public Investment Fund; Al Qatani, CEO of Spark; Hong Sang-beom, Executive Director of SeAH Besteel. Photo by SeWon Changwon Integrated Special Steel.

SeAH Changwon Special Steel plans to utilize this factory not merely as a production entity but as a strategic hub for the Middle Eastern market. Through building an integrated portfolio with steel and special metal material affiliates under SeAH Besteel Holdings, such as SeAH Besteel and SeAH Aerospace & Defense Materials, it aims to expand its presence in the energy and infrastructure markets in the Middle East region.

SeAH Changwon Special Steel expects synergy between its localization strategy for production bases and the Saudi government’s policy of supply chain internalization. With the groundbreaking of this factory, SeAH Changwon Special Steel plans to create over 200 new jobs locally in Saudi Arabia. On the 30th of last month, SeAH Holdings and Aramco signed an MOU for cooperation in recycling business in the Saudi region, further expanding their influence in the Middle Eastern market.

Lee Sangeun, CEO of SeAH Changwon Special Steel, said, “We expect to significantly contribute to the Saudi government’s manufacturing promotion policy and to help raise awareness of the competitiveness of South Korea’s steel manufacturing industry.” He added, “Going forward, through a strong partnership with Aramco, we plan to actively seek opportunities to participate in energy, infrastructure, and smart city projects within Saudi Arabia and the Middle East region.”