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UAE creates world’s fifth largest aluminum company in $15 billion merger

Published time: June 03, 2013 13:52
Reuters / Steve Crisp

Reuters / Steve Crisp

The UAE is merging two state aluminum companies to create the world’s fifth largest, with an estimated value of $15 billion.

The new entity, Emirates Global Aluminum, will be jointly owned by Dubai Aluminum (Dubal) and Emirates Aluminum (Emal).

Together, they will have the capacity to produce 2.4 million tonnes of aluminum per year by 2014, according to an official statement.

"Emirates Global Aluminum will build on strong foundations of leadership, to become a major industrial champion and engine of economic development for our people," Khaldoon Khalifa al-Mubarak, the chief executive of Mubadala, one of the owners of the Emal concern.

The president and chief executive of Dubal, Abdulla Kalban, will be the new managing director and chief executive of the merged companies.

Dubal is owned by the Investment Corporation of Dubai (ICD) and Emal is a joint venture between the Abu Dhabi sovereign fund Mubadala and ICD.

The Emal plant is due to complete its $4 billion phase two by the end of 2014, when its capacity will rise to 1.3 million tonnes from its current 800,000 tonnes a year.

Alongside gold and oil, non-ferrous metals have been hit hard in 2013.

Experts foresee a drop in prices for aluminum, copper and nickel by some 5%-10% in 2013, and by 8% to 13% next year.

The rise of the Chinese economy has played a large part in the 10-year commodity market boom, and now that it, and other economies are  slowing down, non-ferrous metal companies are rethinking their strategies to tackle the oversupply and demand contraction.

The world's largest aluminum company, Rusal, announced a 300,000 tonne cut in production in 2013 after suffering financial losses last year, with revenue down almost 12 percent.

Oversupply is suffocating companies and cutting profit margins, but in the Persian gulf, some countries have been subsidizing the industry to create jobs.

In 2011, Dubal Chairman Sheikh Hamdan Bin Rashid Al-Maktoum, a member of the ruling family, was quoted by a local newspaper as saying that Mubadala had offered to buy a stake in DUBAL, Reuters reported.

Comments (3)

 

Trevor Jackson 05.06.2013 11:35

Most people don't know that aluminium has a lot of energy and can be used in a special kind of battery (wiki aluminium battery) to drive cars for long distances with no emissions.

The Rusal experimental plant in Siberia has developed CO2-free smelting which just produces oxygen. Finally, aluminium used to power cars is now cheaper per mile than gasoline. So excess capacity is good!
(see YouTube 'UK Column interview with Trevor Jackson' for more details)

 

Omar Saeed Alshaikh 04.06.2013 20:42

Big step forward for a better economy. Congratulating UAE

 

paul 03.06.2013 14:09

The sucessful aluminium producers of tomorrow will be the low cost producers like Vietnam the country with the worlds largest bausite deposits.They will also have new smelters powered by low cost nuclear power,and low cost transport costs to major markets.

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