GOIC issues a report on aluminum industry in GCC

In a report lately issued by GOIC it is stated that primary aluminum production has steadily increased during the last three decades from 0.9% in 1975 to 4.9% in 2005. Also the report says that it is expected that a quantum jump is likely to take place during the next decade raising GCC share to around 10% by 2010 with the expansion of existing smelters and commissioning of new smelters, thus establishing the GCC region as a major player in global aluminum industry.

The report also clarified that the capacity build up is likely to exceed 3.75 MPTA by 2010 when the new smelters are commissioned in Oman, Saudi Arabia and Qatar, and when the planned expansion program of ALBA with installation of the sixth pot line project is implemented. The capacity will further increase if the long-term plan of DUBAL is realized to achieve 1.5 Mt/yr by 2011.

The report also added: ALBA's annual production of metal was 525,000 Tons and 732,000 Tons in 2004 and 2005, respectively. 100% of slabs are consumed by GARMCO for conversion to flat products. 99.7% of aluminum ingots are exported to international markets. While in DUBAL the production was 600,000 TPA of aluminum in 2004.

Being located in Dubai, DUBAL has the advantage of expediting shipments to markets in the Far East (Japan, Korea, Taiwan and China), the ASEAN region, as well as Europe and USA. Furthermore, it also reported that plans are ahead for establishing new smelters in Oman, Saudi Arabia and Qatar. Oman is having a long-standing plan for setting up an aluminum smelter in Sohar. As a joint venture of Oman Oil Company, the project is executed with an initial capacity of 330,000 TPA, and it is scheduled to double its capacity to 660,000 TPA by 2010. In Saudi Arabia, there is a good reserve of about 126 Mt of bauxite containing 57.5% alumina. Maaden Co. has decided to build an aluminum smelter within a project that will comprise the mining project in the north, and a bauxite refiner and an aluminum smelter on the east coast. The project is estimated to cost US D 302 billion with a capacity of 600,000 TPA of aluminum. Yet, due to lack of railroad that can carry bauxite from the north to the east coast, the project may not be feasible till a rail link is established. The indicative timeframe is 2008-2009.

As far as Qatar is concerned, the report says, that the indicative timeframe is 2008/2009. As for Qatar, the proposed smelter project is to be implemented by a joint venture company of QP and Hydro, and to be based on Hydro reduction technology. The smelter will be located in Mesaieed Industrial Area, with a proposed capacity of 570,000 TPA, and the indicative timeframe for commissioning is 2009.

In addition, the report talks about the semi-finished aluminum products, and that the GCC states made notable progress in the production of rolled and extruded products. They have almost attained self-sufficiency. For extruded products, they meet regional requirements and export 40% of the production to international markets. More than 80% of cold rolled products are exported. Yet, they still import 55,000 TPA of rolled products, mostly foil and coated flat products. UAE comes first in aluminum secondary metal product firms (80), followed by Saudi Arabia (5), Bahrain (2), and one each in Kuwait, Oman and Qatar. As for rolling mills, there are two establishments in the GCC states: GARMCO in Bahrain and Profiles RHF LLC in Sharjah, UAE. GARMCO, with a production capacity of 162,000 TPA of cold rolled products and 20,000 TPA of foils, produced around 138,000 TPA of cold rolled products in 2004, and 150,000 tons in 2005, as well as 15,000 tons of foils in 2004.

The Profiles RHF LLC of Sharjah operated in July 2000 with a capacity of 20,000 TPA of rolled products and 5,000 TPA of foils. The plant has a plan to increase cold rolling capacity to 65,000 TPA.

Due to the expansion in the construction sector, several extrusion plants have been set up all over GCC states. There are 22 major extrusion plants in the region with a total production capacity of 300,000 TPA, and the overall capacity utilization exceeds 88%. Most of the plants have anodizing, powder coating and painting facilities. About 60% of the extruded products are used in GCC and the balance is exported to international markets.

The report also says that Cables are manufactured in Midal Cables which started production in 1977 as a joint venture between Inter Steel Bahrain and Olex Cables Australia. The major product lines are aluminum and aluminum alloy conductor and wire, metal form products, and aluminum and aluminum alloy redraw rod and wire. The metal form products are manufactured by Conform extrusion technology for both simple and complex shapes in solid, hollow and sheet forms of aluminum and aluminum alloy. 60% of Medal's products are exported to overseas markets in 57 countries. A number of downstream industries have come up to draw the cast aluminum rod into wires.

Aluminum powder is produced in Bahrain Atomization International Company set up in 1973 as a joint venture between the Government of Bahrain and Breton Investments Limited. The plant capacity, which is fully utilized, is 6,500 TPA. Almost 100% of the production is exported.

Aluminum wheels are produced by Aluwheel Company in Bahrain. Several models of alloy wheels blank castings and wheel alloy ingots are produced from the liquid aluminum supplied by ALBA. The production capacity is around 15,000 TPA of which 20% is for blank wheels and 80% for alloy ingots. 100% of the products are exported.

The number of firms for aluminum finished product industries amounts to 496 with investments exceeding US D 950 millions, and labor force of more than 24,000. Of these industries, 16 are engaged in coating, 8 in barrel making, 12 in foil production and more than 400 in fabricated items such as doors and windows, to meet the requirements of the booming construction sector.

The average imports and exports of aluminum products in the GCC states for the last four years, the report says, amount to 407,490 TPA and 1,104,970 TPA, respectively. Thus, the GCC region as a whole is a net exporter of aluminum products. Bahrain and UAE are the net exporters, and all other states are net importers.

The report also clarifies that the environmental aspects, both the smelters of ALBA and DUBAL are certified ISO 14000 companies, and have shown considerable concern for the environment. ALBA has spent a huge sum of US D 310 millions towards improvement in environment. DUBAL has also spent over US D 120 millions in environment management plan during the last two expansion programs. Also, there has been considerable progress in downward industries for semi-finished rolled and extruded products, and powder in the GCC states. The opportunities exist for setting up further downstream facilities for production of semi-finished products as well as parts and components for development of engineering industries.