The company expects to grow capacity to 460,000 tonnes in a decade
Gulf Aluminium Rolling Mill (Garmco)’s 2012 output has dropped below the 2011 level and well short of the targeted figure, a development it attributes to the slowdown in the market in the first quarter of the year and to Alba’s failure to supply contracted quantities.
Garmco ended 2012 producing 143,000 tonnes against 146,000 tonnes in the previous year and the targeted level of 155,000 tonnes after supplies of slabs and ingots metal from Alba fell short of the contracted amount by approximately 14,000 tonnes, Garmco CEO Dr Adel Hamad told this magazine.
Garmco has launched initiatives to increase raw material self-sufficiency and enhance total annual capacity to 460,000 tonnes from 165,000 tonnes currently within the next 10 years.
 |
Dr Hamad: aluminium gaining share |
A project it is now implementing will provide 120,000 tonnes of slab made from scrap and ingots purchased from Alba and the open market and melted for its rolling process. “This will satisfy to a major extent the shortfall from Alba. We’re keen to expand our overall capacity and Alba is incapable of giving us the extra tonnage unless their line six project comes live,” said Dr Hamad. The company is installing furnaces and a direct chill casting unit and work is expected to begin soon. Garmco will be able to sell surplus slabs to the open market.
To reach its planned capacity of 460,000 tonnes, Garmco will utilise its inhouse current slab capacity of 80,000 as well as 120,000 tonnes of slab it receives from Alba. The new project will provide another 120,000 tonnes, taking the total to 320,000 tonnes within the next two years. The company recently completed a tension-levelling line, adding 8,000 tonnes to capacity, and in subsequent years will add a third cold rolling mill along with some capacity it expects to gain from improvements within its system.
Beginning September 2013 the company will import metal form Oman incrementally, reaching eventually 120,000 tonnes over a period of four years. Garmco has targeted production of 155,000 tonnes for 2013.
OPTIMISM PREVAILS
The company is optimistic that the current depressed market will revive as the economic cycle turns. “Also, aluminium is gaining more share as it substitutes many other materials due to its properties, cost and application suitability,” Dr Hamad noted.
 |
Dr Hamad (right) receives an award |
Garmco is concentrating on markets where it expects to gain positive results, taking advantage of supply and demand, cost of manufacturing, the differential between LME and SME prices, the currency exchange rate, substitution and the investment projects.
The company’s new products in 8150 and 8011 alloys continued to do well in 2012, with most sales going to the Middle East and India. In the Middle East, Garmco sells these alloys to its own foil mills to produce products such as finstock, household foil, semi-rigid containers and lidding. The alloys are favoured over plastic which could be a health hazard.
The company makes coils, circles and foil. In 2012, coil sales were higher than those of circles in the Middle East and the US as the material is convenient and lends easily to cutting for different applications.
Garmco products cover the 1,000 series, 3,000 series, 4,000 series, 5,000 series and 8,000 series. The 5,000 series alloys, which accounts for 40 per cent of production, has applications in the marine, electronics and building industries.
The company plans to introduce two other alloys with applications in the automotive industry and these will replace steel frames thanks to the alloys being lighter and stronger.
 |
Garmco plans to introduce new alloys for |
The Middle East accounted for 35 per cent of total Garmco revenues, the Far East 30 per cent and the US 15 per cent. Volumes in the Middle East and the US were up 5 per cent but Europe plunged 30 per cent.
About Garmco’s US team, Dr Hamad said: “They worked in a depressing situation, increased the customer count and gained higher premiums. They were able to get reduced payment terms. Everything we produced for our US subsidiaries we sold.” The company has two manufacturing subsidiaries in the US – Midamerica Extrusions, Indianapolis, and Republic Foil, Danbury, Connecticut. The former was de-invested in 2012.
AWARD
Garmco was declared winner of the first excellence award on safety hosted by the Gulf Aluminium Council at the 16th Arabal International Aluminium Conference in Qatar.
“Winning the award is another testimony to Garmco’s distinguished record in maintaining environmental, health and safety standards,” said Dr Hamad at the gathering in the presence of CEOs of aluminium companies. Other awards it received were the Biz Award 2012 presented by the World Council of Business and a business excellence award given by Global Trade Leaders’ Club, Spain.
