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.