Emirates Global Aluminium to cut 4 per cent of workforce
Emirates Global Aluminium has cut 250 jobs as a result of the merger of its operations in Dubai and Abu Dhabi.
The cuts come amid a global slump in aluminium prices.
The layoffs are part of a restructuring plan designed to help the producer, created by the merger of Dubai Aluminium and Emirates Aluminium, meet its ambitious growth goals. The 4 per cent reduction of its headcount affects non-industrial support positions across the group, EGA said.
No Emiratis are included in the retrenchment of the 250 positions. The job cuts are a direct result of the merger that was first announced in 2013 and completed last year.
It combined Dubal’s core operations in Jebel Ali with Emal’s Taweelah facilities, which taken together had a total annual production capacity of 2.4 million tonnes last year, making EGA the fifth-largest aluminium producer in the world by volume. EGA, jointly owned by Mubadala and the Investment Corporation of Dubai, is spending more than US$5 billion to boost capacity at the Dubai smelter and build an alumina refinery in Taweelah, which it hopes will help it become the world’s fourth-biggest producer within three years.
More than 4.8 million tonnes of aluminium was produced in the GCC last year, compared to more than 27 million tonnes in China, the world’s biggest producer, and 4.5 million tonnes in North America, according to the International Aluminium Institute.
Global demand should continue to rise strongly because of technological advances and efforts to substitute aluminium for steel and copper, said Ole Hansen, the head of commodity strategy at Saxo Bank. Aluminium is increasingly used by car makers, who are favouring the metal over steel for some aspects of production because of its lightness, which boosts vehicle fuel efficiency.
However, in the shorter term, prices will be challenged by overproduction, which has led to an erosion of profitability among producers, said Mr Hansen. After rallying strongly into the early part of May last month, the price of aluminium has since lost more than 10 per cent before hitting a 15-month low last week at $1,740 per metric tonne.
“The near-term solution points towards curbing supply, not least from China, which eventually should provide the sector with support and help the price make a comeback towards $2,000.”
EGA expects the new 2.2 million tonne capacity alumina refinery in Taweelah to create about 600 jobs by the time it begins operations in 2017, with many technical roles earmarked for Emiratis.
The company is also spending $5bn to develop a bauxite export mine in Guinea – bauxite is processed into alumina, which in turn is processed into aluminium – to feed the Taweelah facility with about 12 million tonnes of the ore annually. It also has a 2 million tonne capacity alumina refinery planned for Guinea by 2020.
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Published: June 11, 2015 04:00 AM