SIJ and Saudi Arabia Collaborate on €1.5 Billion Electrosteel Investment Project
In a significant move to bolster its industrial capabilities, the Slovenian steel group Slovenska Industrija Jekla has entered into a €1.5 billion investment deal with the government of Saudi Arabia. Signed on January 16, 2025, the agreement focuses on the development of electrosteel production in Saudi Arabia, marking a major step in the country's industrial diversification efforts.
The deal was finalized in Riyadh with the presence of Slovenia’s Minister of Finance, Klemen Bostjancic, and is poised to become the largest single Slovenian investment abroad to date. This strategic partnership is part of Saudi Arabia's long-term plan to establish a robust industrial base and reduce its reliance on oil, in line with the country’s Vision 2030 goals.
Project Overview: Electrosteel Production in Ras Al-Khair
The investment will be used to set up a state-of-the-art electrosteel production facility in Ras Al-Khair, a key industrial hub located in the southeastern region of Saudi Arabia. Electrosteel, also known as electric steel, is produced using an electric arc furnace process, which provides a more sustainable and energy-efficient method of steel production compared to traditional blast furnace methods.
Electrosteel is prized for its high quality, making it suitable for manufacturing various products, including pipes, fittings, and other durable materials used in infrastructure, construction, and industrial applications. The new facility will focus on producing these high-end steel products, particularly premium hot-rolled strips, which are essential in multiple industries requiring strong, reliable materials.
Financing and Technological Expertise
The project will be largely financed by Saudi Arabia, with Slovenska Industrija Jekla playing a pivotal role in providing the technological expertise and advanced solutions needed for the facility’s construction and operation. SIJ, a leader in steel production and innovation, brings decades of experience in high-tech steel production processes to the table, ensuring the facility will be equipped with cutting-edge technology.
With SIJ's contribution of know-how, the project is expected to benefit from the latest advancements in steel production, furthering the industrial development of Saudi Arabia. This collaboration reflects both countries' commitment to enhancing technological transfer and workforce development.
Supporting Saudi Arabia’s Vision 2030
This major investment aligns with Saudi Arabia's Vision 2030, a blueprint aimed at diversifying the economy and reducing the Kingdom’s dependence on oil revenues. By investing in high-value industries like steel manufacturing, Saudi Arabia hopes to create new revenue streams, generate employment, and develop a self-sustaining industrial base.
The establishment of the electrosteel facility will provide Saudi Arabia with the capability to produce high-quality steel products locally, rather than relying on imports, thus strengthening the country’s industrial supply chain. Additionally, the facility will contribute to the creation of numerous jobs and foster the development of a skilled workforce in the region.
Timeline and Future Prospects
The electrosteel production plant is scheduled to become operational by 2029. Once completed, it will be a significant asset in the Gulf region's steel production landscape, positioning Saudi Arabia as a competitive player in the global market for electrosteel products. The facility will also complement other infrastructure projects in the country, particularly in sectors like construction, oil and gas, and utilities, where durable steel products are in high demand.
The joint venture between SIJ and Saudi Arabia is set to contribute to the region's long-term economic growth, aligning with the broader goals of industrial diversification, innovation, and economic self-sufficiency.
