DUBAI, 25 June 2007 — The Gulf Cooperation Council countries witnessed a boom in aluminum industry, and the UAE is poised to be a leader in this field, according to a report by the Global Investment House of Kuwait.
In recent years, China has emerged as a main driver of market fundamentals. Russia is also growing in importance in terms of industry developments and the GCC region is set to emerge as a major production center due to availability of cheap source of power, which constitutes more than 25 percent of the cost, the report said.
Aluminum production, which was once confined to western countries, is now shifting to the developing countries that either have the raw materials or have the energy resources to produce aluminum, namely, the GCC region with its abundant energy resources.
The GCC region has two established smelters in the UAE and Bahrain. UAE’s Dubal is currently one of the largest single-site aluminum operators in the eastern world. In addition, it is now ranked as the 7th largest global producer in the industry with a current production capacity of 861,000 tons per annum in 2006 and the capacity is expected to reach 920,000 tons in 2008. UAE, because of its leading and successful DUBAL, is poised to be one of the leaders.
Aluminum Bahrain (ALBA) was commissioned in 1971 to diversify the national economy from its heavy dependence on oil. It has since grown from a modest 120,000 tons per annum smelter to 872,000 tons per year, making it one of the largest smelters in the world, with plans to expand the capacity further to 1.3 million tons per year.
Besides UAE and Bahrain, other GCC countries like Oman, Qatar and Saudi Arabia are planning to set up aluminum smelters, entirely on the basis of the availability of inexpensive gas.
Capacity build up is likely to exceed 3.75 million tons per annum (MTPA) 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 to achieve 1.5 MTPA by 2011 is realized.
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 percent. Most of the plants have anodizing, powder coating and painting facilities. About 60 percent of the extruded products are used in GCC and the balance is exported to international markets.
The number of firms for aluminum finished product industries amounts to 496 with investments exceeding $950mn, and a labor force of more than 24,000.
