A NORTH Yorkshire steel firm has agreed a breakthrough partnership in the Middle East to make up for plummeting demand at home.

Severfield-Rowen, based in Dalton, near Thirsk, said the outlook for the UK steel industry was poor amid rising costs of raw materials and cuts to public sector building projects.

In a trading statement yesterday, Severfield, the country’s leading structural steelwork fabricator, said that its efforts to identify growth areas overseas had yielded an alliance with Saudi Arabian business Zamil Steel Industries.

The deal will see the firm export steel to the Middle East to be used in major engineering and construction projects.

Severfield also hopes that its growing presence in the region will boost its chances of securing contracts including stadium and infrastructure work when Qatar hosts the World Cup in 2022.

However, the picture closer to home remains disappointing due to a slower-thananticipated economic recovery reducing public expenditure and significant increases in steel prices at a difficult point in the business cycle.

It said its 2010 results, to be announced in March, would be in line with expectations and that it has a current order book of £217m in the UK.

Tom Haughey, chief executive of Severfield-Rowen, reassured workers in the region that there were no plans to cut jobs and, with a healthy order book for the first half of the year, the immediate outlook was good.

“We are working around the clock to bring in new business that will help to keep us busy in the second half of 2011, but we expect that profitability will take a dip because of the wider economic climate,” he said. “That is why we have been looking further afield.

“The venture in the Middle East will give us a foothold in new markets. We’ll be working with our partner to bid for contracts in Saudi and North Africa, such as universities, railways, airports and highrise buildings.

“It is not an easy time for the industry, but I am confident we are in a strong position and the future looks positive.”

In recent years, Severfield has worked on various highprofile projects, including the centre court roof at Wimbledon, Heathrow’s terminal five, the 2012 Olympic Stadium and the 80-storey Shard of Glass skyscraper in London.