Three Gulf investors have formed a joint venture to build a $ 400 million steel plant in the southern Oman city of Salalah, a statement by the company said.

Dhofar Steel has been formed by a joint venture involving investors from the UAE, Saudi Arabia and Oman. The shareholders include Al Suwaidi Group of UAE, Al Tuwairqi Group (Saudi Arabia) and Salalah Development Company (Oman). Creating 1,200 jobs and capitalised at $ 400 million, the new plant, to be built in Salalah.

The new plant will also have the capacity to produce one million tonnes of steel a year, the statement said. However, no start date for construction has been confirmed yet. The venture will be Oman’s second steelmaker. The Al Tuwairqi Group operates steel product plants in Saudi Arabia.

The venture will be Oman’s second steel company, after a pelletising plant operated by Brazil’s Vale in the northern industrial city of Sohar.

Demand for steel in Oman is growing for oil industry and infrastructure projects. The country currently produces an average 902,000 barrels per day of oil; its oil and gas minister said last year that it was aiming for production of 1 million bpd in the next three years.