Metals strategy receives US$100m boost

The Abu Dhabi Government has taken a major step forward in its efforts to forge the metals industry into a pillar of its economy.

The Abu Dhabi Government took a major step forward in its efforts to forge the metals industry into a pillar of its economy following the signing of agreements to set up a US$100 million (Dh367m) aluminium plant at Taweelah. Abu Dhabi Basic Industries Corporation (ADBIC) and Gulf Extrusions agreed to jointly build an aluminium extrusions plant, complementing a smelter that will begin producing metal within weeks.

The plant is the second major "downstream" facility planned for a cluster of metals firms that will transform aluminium produced at the Emirates Aluminium (EMAL) smelter into usable consumer products. The extrusions plant will produce 50,000 tonnes per year of material for use in buildings and cars, the two firms said. "Our collaboration serves to reinforce ADBIC's focused efforts to expand the downstream manufacturing sector in Abu Dhabi," said Jamal al Dhaheri, the chief executive of ADBIC. "This partnership will position the UAE as a leading exporter of aluminium extrusions to international markets."

The aluminium manufacturers will receive at least some of their aluminium in liquid form directly from the smelter, saving them significant costs in transporting and reheating the metal. Yesterday's preliminary agreement follows the signing in June of a final deal between ADBIC and Midal Cables to set up a $100m aluminium rod plant at Taweelah that will produce electric cables. Establishing a metals cluster around the smelter was a priority of Mubadala Development, the strategic investment arm of the Government that was charged with diversifying the economy, said Waleed al Muhairi, the company's chief operating officer. "That's something we spend a lot of time thinking about," he said last week.

"Once you have an enabling smelter, it's not a leap of faith to think" you can build downstream plants, he said. EMAL's smelter will produce more than 700,000 tonnes of aluminium annually when it reaches production capacity next year. The firm will export the majority of its metal to overseas markets, but government officials hope a proportion of the aluminium will be transformed into higher-value consumer products.

ADBIC has taken the lead role in developing the downstream industrial sector, and is building a similar cluster for plastics producers, called Polymers Park, near Musaffah. @Email:[e-mail]