MANAMA, 6 September 2005 — Bahrain’s Prime Minister Sheikh Khalifa ibn Salman Al-Khalifa yesterday officially inaugurated Aluminum Bahrain’s fifth production line. The $1.7 billion expansion project was commissioned in May.

With line 5 going on stream, Aluminum Bahrain, or Alba, became the world’s largest modern smelter and the third largest aluminum factory. The company’s production capacity has now been increased to 840,000 metric tons from 530,000 metric tons.

Sheikh Khalifa, the driving force behind the continued development of Alba, had earlier praised the Saudi role in developing the company. While highlighting Alba’s success, he said the company could be a model for the region and the world.

During the opening he affirmed that the inauguration of Alba’s line 5 would take it to a new stage as one of the largest aluminum factories worldwide. He said that the rise in aluminum production would increase the nation’s exports and foreign trade in line with the government’s plan aimed at diversifying revenue sources and boosting economic development.

Alba’s top two officials, acting chief executive Ahmed Saleh Al-Noaimi and deputy chief executive of plant operations Mahmood Al-Daylami, were ecstatic at the inauguration.

Al-Noaimi described the completion of the line 5 project as a significant, production safety and creativity achievement citing that it was constructed in 24 months with smelter operations beginning in 77 days instead of the standard 180 days.

He also said that it was the first of its kind with 366 production cells compared to the current technology that supports only 288. This represents a 17 percent increase in production capacity. He added that the new line will have “good returns for the investors” and would continue the company’s contribution of 12 percent to Bahrain’s GDP, up from 8 percent in the past.

“We are major players in Gulf and Asian markets and are seeking to expand and increase our share in the Gulf, Arab and African countries,” Al-Noaimi said, adding that Alba’s share of the world market was 5 to 6 percent.

At a press conference a day earlier, Al-Noaimi and Al-Daylami asked the European Union to drop the 6 percent tax currently levied on aluminum imports to the EU. “Negotiations between the GCC countries and the Europeans over the past 10 years to drop the 6 percent tariff had yielded no results because the European side was adamant,” Al-Noaimi said. “They continue to be protective of their industry and there has been no positive outcome of these negotiations.”

Company officials, who just finished work on the line 5, said they were studying the possibility of adding line 6, which if undertaken will add another 300,000 metric tons to their production.

“Work on line 6 will not begin before extensive feasibility studies are carried out,” Al-Noaimi said. “World demand for aluminum increases by 4 percent yearly and it is a new material with possibilities for its use still to be developed. Our company is strategically and geographically located to produce and market it, but no work will be carried out on line 6 until further studies are done,” Al-Noaimi said.

Al-Daylami, meanwhile, said that competition in the industry was based more on efficiency than on marketing. He added that those who are more efficient will survive any slowdown in the market. Alba welcomes the smelter development projects in Oman and Qatar and the possibility of Saudi Arabia and Kuwait entering the market, he said, adding that there was room for everyone with the continued rise in demand for aluminum.

“The region is ready to be a major world center for production because of the availability of energy and experience,” Al-Daylami said. “There are foreigners involved in the development of the smelters in Qatar and Oman. We expect increased foreign investment in these projects because of the increased efficiency of the GCC smelters and I expect the region’s aluminum production to double in the next 10 years.”

According to Al-Daylami, the old smelters comprising line 1 to 4 and the other relatively new ones had almost paid off their investment. At present the Gulf region produces 1 million tons of aluminum yearly out of the 28 million ton global output.

The line 5 includes a new power station with a capacity of 650 megawatts, which raised the total power capacity of Alba to 2,170 megawatts. It also included a new carbon plant, casthouse and other supporting facilities.

The Bahrain government owns 77 percent of Alba, Saudi Public Investment Fund (20 percent) and Germany’s Breton Investments Ltd. (3 percent).