Emal aims to double sales in Abu Dhabi

Emirates Aluminium (Emal), the first company to populate Abu Dhabi's new industrial zone in Taweelah, aims to double its sales into the UAE as the zone attracts more downstream industry.

Emirates Aluminium (Emal), the first company to set up in Abu Dhabi's new industrial zone in Taweelah, aims to double its sales in the UAE as the zone attracts more downstream industry.

Emal, a joint venture between Mubadala Development and Dubai Aluminum (Dubal), currently sells close to 100,000 tonnes a year to domestic buyers.

New customers in the Khalifa Industrial Zone Abu Dhabi (Kizad) are expected to double this figure within two years.

Mubadala is a strategic investment company owned by the Abu Dhabi Government.

"Downstream industries are moving into Kizad, which will increase our percentage of sales in the region," said Saeed Fadhel Al Mazrooei, Emal's chief executive.

The company has already concluded supply agreements with two companies setting up shop in Kizad and is in discussions with another two, he added.

The 417 square kilometre Kizad is an integral part of Abu Dhabi's ambition to promote industrialisation as one aspect of the economic diversification of the emirate.

The company is also set to more than double its exports to the United States this year.

Sales to the US will increase to 250,000 tonnes from 100,000 this year, said Mr Al Mazrooei.

Emal is presently adding another 550,000 tonnes of production capacity to its 6 sq km smelter complex in Kizad, bringing its output to 1.3 million tonnes per year by 2014.

The production of aluminium is highly energy intensive and the availability of cheap natural gas for use in power generation is regarded as a major competitive advantage for Gulf players.

But while GCC governments have managed to allocate gas to their industries, the region is facing a looming gas shortage that threatens to undermine industrial growth.

The advent of nuclear power will help to avert an energy crunch. Abu Dhabi is preparing to build four nuclear reactors at a cost of US$20 billion (Dh73.46bn), the first of which is due to come online in 2017.

"We are waiting for the nuclear plant to come online, that will change the equation," said Mr Al Mazrooei.

He said he was unconcerned about competition arising from other ventures in the Middle East, and forecast a growing market for Emal's product.

Its parent company Dubal is already producing more than 1 million tonnes of aluminium in Jebel Ali.

In Saudi Arabia's Ras Az Zawr industrial cluster, the state-owned miner Ma'aden has teamed up with the aluminium giant Alcoa to create the Ma'aden Aluminium Company. A 750,000 tonnes a year production complex is under construction.

In Oman, Rio Tinto Alcan holds a stake in the Sohar aluminium smelter that produces 350,000 tonnes annually.

In spite of a recent dip in aluminium prices and global demand, analysts predict a rebound, with China forecast to further increase its use of the metal.

"We expect [aluminium] to strongly benefit from the wave of consumption upgrading, consumer goods spending and an increase in car sales over the next five years," said Roxana Mohammadian-Molina, a Chinese market analyst at Barclays Capital.

"Even if we grow together, we won't meet demand," said Mr Al Mazrooei.

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