State-owned Emirates Steel Industries has signed a $474m contract with Italy-based Danieli Corporation for construction of phase II B of the company's overall $2.45billion expansion plan.

Under the arrangement, Danieli will be responsible for construction of a heavy section rolling mill with a production capacity of 1 million tonnes per year, which will add to Emirates Steel's total capacity by the end of 2011.

Company official stated that the Phase II B will produce heavy section beams, columns and sheet piles.

It should be noted that in June 2009, Emirates Steel inaugurated phase one of the expansion, which has served to transform the company from a steel processor to the first fully-integrated steel manufacturer in the UAE.

The completion of phase two will double Emirates Steel's steelmaking capacity, and make it the only producer of heavy sections in the Middle East.