Emirates Global Aluminium in three-year supply deal with German BMW

EGA says it closes direct aluminum sales pact with BMW for engine production.

A BMW factory in Jakarta, Indonesia. EGA’s agreement with the German marque is the first dir­ect deal of its kind with a ­major automotive company. Dimas Ardian / Bloomberg

Emirates Global Aluminium has struck a three-year deal to supply high-quality aluminium to the German luxury car maker BMW that will be used to manufacture car engines.

EGA’s agreement is the first dir­ect deal of its kind with a ­major automotive company and comes amid intensifying efforts by the UAE to diversify its economy away from oil, the price of which has fallen steeply over the past two years.

“Winning BMW as a direct customer is important for EGA because their standards are so high, both for the aluminium itself and how it is made,” said Abdulla Kalban, managing dir­ector and chief executive of EGA. “EGA produces high-quality aluminium with world-class efficiency and environmental responsibility. We have spent decades developing technology in the UAE to improve our processes and make this possible.”

No financial details for the agreement was given nor was it divulged to which plants or which cars precisely the metal would be used in.

A spokesperson for EGA was unable to provide any other details.

A public relations consultant for BMW did not respond to questions before the newspaper went to print.

The UAE, the world’s fourth-­largest producer of aluminium, is counting on EGA to help push its efforts at making the country’s economy less dependent on oil amid the biggest slide in energy prices since the global fin­ancial crash of 2008.

EGA, which was created by the merger of Dubai Aluminium and Emirates Aluminium in 2013, posted an almost 50 per cent drop in net profit last year as the price of aluminium plunged amid a supply glut.

Despite the hard times for commodity producers, Mr Kalban said in June that he was bullish about the long-term demand for aluminium, with its increasing use in the manufacture of cars, aircraft and construction fuelling demand.

Already there are signs that demand is increasing. The price of aluminium traded in London has gained about 15 per cent so far this year after dropping 19 per cent last year.

At the same time, EGA has been putting its money where its mouth is and forging ahead with investments to bolster its production of the metal.

Over the summer, the company said it was moving ahead with the construction of a US$1 billion bauxite mine in the Republic of Guinea.

The investment will secure access to the mineral used in making aluminium and boost the company’s production of the metal in the long run.

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