Aluminium heavyweights step up to the challenge

Demand for aluminium in the region is rocketing. Christopher Sell profiles the production heavyweights.

ANALYSIS, Business

It was reported earlier this year that demand for aluminium in the GCC is set to hit five million tonnes before the end of the decade. And with multiple projects in the pipeline - an estimated US $14 billion (AED51 billion) to date and $45 billion currently under construction in Dubai alone - the increase in aluminium supply is paramount to feed the construction boom.

With this in mind, regional production could bubble over the seven million tonne mark by 2012, accounting for almost 20% of the world's aluminium output. Construction Week casts an eye over some of the region's players that are striving to meet demand caused by frantic growth in the industry.

Dubai Aluminium Company (Dubal)

Established in 1979, Dubal, which has become the world's seventh largest producer of premium quality aluminium, expects to grow the volume of its sales to the Middle East and North Africa regions by 300,000 tonnes per annum (TPA) by 2009, which equates to a 25% increase on the 240,000 tonnes supplied to the region in 2006.

At the same time, these figures mean that the proportion of Dubal's production volumes sold to the Middle East and North Africa region will increase from 28% to 33% of the company's total production.

Dubal has one eye on burgeoning efficiency demands after it signed an agreement with UAE-based zero carbon developer, MASDAR, this summer, to deliver and register a project under the Clean Development Mechanism (CDM) of the Kyoto Protocol, which will reduce greenhouse gas emissions associated with aluminium smelting.

In terms of the agreement, MASDAR will be responsible for developing the CDM project, which will address a new technology to be implemented by Dubal to reduce perfluorocarbons (PFCs) during the electrolyte reduction of aluminium.

Emirates Extrusions

A subsidiary of M'sharie, the private equity arm of Dubai Investments, Emirates Extrusions announced this month that it will open a new facility at Dubai Investments Park as part of an expansion plan that is predicted to cut the widening gap between supply and demand of extruded aluminium profiles in regional markets.

The new extrusion plant will house four high-capacity production lines and will feature the latest technologies in aluminium extrusion. Also up for construction is a new powder coating plant, which is set to improve Emirates Extrusions' production capacity by more than two tonnes per hour. The plant will be constructed on a 42,000m2 plot with about 29,470m2 allocated for offices and the warehouse, which will accommodate the production lines.

By upgrading and increasing its production facility, Emirates Extrusion is looking to satisfy not only the booming construction market of the UAE, but also other high-development areas such as Qatar, Kuwait and Bahrain. The company is also increasing its market presence in East African countries such as Djibouti, Eritrea and Ethopia, which are experiencing an increase in demand for extruded aluminium profiles following government-led investments and development initiatives.

Aluminium Bahrain (Alba)

When Alba opened Line Five in 2005, the company became the world's largest aluminium smelter. Built as part of a $1.7 billion expansion project, which included the construction of a new power station, carbon casthouse and other facilities, it is the longest reduction line in the world and increased Alba's annual production capacity to more than 830,000TPA.

Alba was incorporated by Amiri Charter in 1968 and officially commissioned on 11 May 1971 as a 120,000-tonnes-per-annum smelter. This output was expanded in 1981, 1990, 1992 and 1997 - making the smelter one of the largest single-site producers of aluminium in the world. The three shareholders are the Government of Bahrain (77%), the Saudi Public Investment Fund (20%) and Breton Investments (3%).

Gulf Aluminium Rolling Mill Co. (Garmco)

The company was formed in 1981 following a decree issued by HH the late Emir of Bahrain, Sheikh Isa Bin Salman Al Khalifa, and undertaken with the governments of Saudi Arabia, Kuwait, Iraq, Oman and Qatar.

The plant was constructed by Kaiser Engineering, USA. The machinery was installed by Kobe Steel of Japan who also undertook the start-up operation and the training of local staff at one of its aluminium plants in Japan.

Garmco produced its first 20,000 tonnes of rolled aluminium in 1986, while today, the company is the largest downstream aluminium facility in the Gulf region, complementing the success of its close neighbour, Alba.

The original Garmco facility had an annual capacity of 40,000 tonnes. Through equipment enhancement, this increased to 70,000 tonnes by 1990. Garmco then invested in a second cold-rolling mill and related facilities, resulting in the current annual capacity of 125,000 tonnes.

A further update of the facilities was carried out in 2004 to raise this to 145,000 and in 2005, more fine tuning on existing equipment resulted in an annual capacity of 165,000 tonnes.

Emirates Aluminium (Emal)

Emal was created through a joint development agreement signed between Dubal and the Mubadala Development Company in Abu Dhabi in February 2007. When operational, it will be the largest single aluminium smelter in the world. The first of the two-phase project will be operational by 2010 with 700,000TPA capacity. The second phase of the smelter will produce a further 700,000TPA at an approximate cost of $3 billion. The complex, which will be at the 6km2 Khalifa Port and Industrial Zone in Taweelah, Abu Dhabi, will have a total of 1.4 million TPA capacity on completion of both the phases.

When full capacity is reached in 2013, the smelter is expected to produce one third of the GCC's forecasted demand when full capacity is reached in 2013.

Groundbreaking was carried out 31 May 2007. At the ceremony, the company announced the awarding of the engineering, procurement, construction and management contract for the smelter project to a joint venture comprised of Canada's SNC-Lavalin and Australia's WorleyParsons. The total value of the contract is approximately $300 million.

Reem Emirates Aluminium

Reem Emirates Aluminium was set up to capitalise on the burgeoning growth of Abu Dhabi, and especially the growing demand for architectural finishes and metal works in the capital. A new state-of-the-art factory built in Mussafah on a 70,000m2 plot is due to open in late 2007 or early 2008.

When up and running, the factory will be the largest in the UAE, with a production capacity of 400 panels per day, which equates to approximately 2,000m2. It will provide custom made architectural cladding elements with particular emphasis on designing and manufacturing unitised curtain wall panels.

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