WITH the Bahraini Government granting approval for the natural gas requirements of Aluminium Bahrain (Alba)’s planned expansion, work on the $2.5 billion Line 6 project is set to begin by year’s end.

Meanwhile, Alba’s total sales for the first six months of this year were BD376.4 million ($1.001 billion) versus $1.018 billion in the corresponding period last year, on the back of higher premium partially offset by lower LME prices.

Sales for the second quarter of this year reached $515 million compared with $520 million for the same period in 2013.

The company posted a net income of $86 million for the first half of 2014, versus $163 million.

Net income for the second quarter of 2014 stood at $41m compared with $55m, driven by low LME prices.

The board has recommended an interim cash dividend of 12 fils per share, which is $45 million. 

Sheikh Daij: expansion a major boost to the economy

Alba chairman Sheikh Daij bin Salman Al Khalifa said in a statement that Line 6 would make Alba one of the largest single-site smelters in the world and provide a major boost to Bahrain’s economy. The company is currently the fifth largest smelter in the world.

The sixth potline, which will take around three years to complete from the time work commences, will boost current production capacity by 45 per cent to around 1.3 million tonnes.

The last major expansion took place in 2005 when Alba added a fifth potline at a cost of $1.7 billion.

Sheikh Daij thanked HRH the Prime Minister, Prince Khalifa bin Salman Al Khalifa, and HRH the Crown Prince, Deputy Supreme Commander and First Deputy Premier, Prince Salman bin Hamad Al Khalifa, for their continuous support to Alba and for granting approval for the natural gas allocation for Line 6.

“Currently, Alba sells approximately 50 per cent of its production to the local downstream with the plan to further increase this level as part of the Line 6 expansion. Line 6 will create many new employment opportunities for Bahrainis at both Alba and the local downstream industries,” Sheikh Daij stated.

A fifth power station will be built as part of the expansion.

Alba chief executive Tim Murray, in remarks to the Gulf Daily News, sister publication of Gulf Industry, said: “The initiative will help Bahrain capture a significant portion of the aluminium value chain, creating many co-investment as well as employment opportunities downstream.”

Murray said global demand for aluminium remains healthy and is expected to grow at an average of 5 per cent this year with emerging markets continuing to be the key growth driver.

“However, the market will be oversupplied and without further production discipline, prices are likely to struggle.

“The company is trying to lower costs to stay competitive internationally. This year, the focus is on leveraging strong physical premiums and accelerating our initiatives under ‘Project Titan’,” he said.

Started in February, Project Titan is a two-year efficiency programme aimed at reducing cash cost by $150 per tonne by the end of January 2016. Murray said the smelter will continue leveraging technology to streamline and modernise its operation in its quest to raise productivity.

The smelter is a key pillar of Bahrain’s economy and contributes around 10 per cent of the national GDP, he said. Nearly 88 per cent of Alba’s 3,000 plus employees are Bahrainis.

About half the company’s aluminium output in the form of billets, slabs, foundry alloys and molten metal, goes to the downstream industry in Bahrain.

PERFORMANCE

Line 5, the last expansion completed in 2005

Alba achieved a production record of 912,700 tonnes of aluminium last year and expects to better that level to 920,000 tonnes this year.

The company reported its production figures were up by 2.5 per cent in the first half of this year, reaching 464,012 tonnes versus 452,727 tonnes in H1 2013, while its sales figures topped 456,282 tonnes, an increase of 1,852 tonnes versus 454,430 tonnes in H1 2013.

Additionally, it was able to sustain its value-added sales for this period with an average of 65 per cent versus 66 per cent in H1 2013.

“Alba is continually focusing to deliver reliable performance despite low LME prices. By leveraging the company’s operational performance along with our integrated marketing approach, we were able to stretch our targets,” said Murray.

SAFETY MARK

Janahi: the new director of administration

The company also reported that it successfully achieved four million work hours without Lost Time Injury (LTI). Its executive management and various managers praised employees for their proactive attitude and commitment toward safety.

“At Alba, we believe that ownership of safety is everyone responsibility and the achievement of four million work hours without LTI could not be achieved without the commitment of employees to this principle. I thank all the employees and the Alba Labour Union for their dedication to making Alba a safe place to work.”

Alba was recently granted the 2014 Occupational Excellence Achievement Award run by the National Safety Council – USA. The award is given to organisations that meet strict criterions based on results in their safety performance in accordance with Occupational Safety and Health Administration (OSHA) requirements in the US. Alba won the award based upon a tremendous reduction in its injury rates during 2013.

Alba runs safety awareness campaigns throughout the year. The company recently launched the Summer Safety Blizzard Campaign – a plant-wide Safety, Health and Environment (SHE) Week – to promote a safe and healthy working environment during the summer months and help employees beat the heat and work safely.

APPOINTMENT

Alba has appointed Abdul Rahman Janahi as the new director of administration.

Janahi joined the company in 1976 as an apprentice.  In 2004 he was promoted to superintendent at the calciner and marine department and then ultimately to manager. He has also worked as manager in Carbon 1 and 2 and most recently was promoted to senior manager for human resources in 2013.  Over the past year he served as acting director of administration.

Janahi is a graduate of the Jordanian Royal Air Force and received a number of certificates in management and leadership. Currently, he is pursuing his MBA from Essec Business School through the French Arabian Business School in Bahrain.

Commenting on his appointment, Murray said: “Abdul Rahman Janahi is another shining example of Alba’s commitment to develop our people from within the company. He started as a young apprentice and has now worked his way up to one of the most senior roles in the company. I look forward to seeing him complete his MBA and his continued contribution to the Alba leadership team.”

TRADE EVENTS

Alba recently participated in the Aluminium China trade event in Shanghai and is making preparations to host the 18th Arab Aluminium (Arabal) conference in Bahrain from November 25 to 27 (See Events section).