THE chief executive of Emirates Global Aluminium (EGA) has said he is bullish about the aluminium market even as aluminium specialists said non-China markets are largely abandoning their cutbacks
“We’re expecting demand to come. Demand is coming from construction, electronics, packaging and transportation industries,” Abdulla Kalban said at a meeting of the Arabal conference in Bahrain where chiefs of other Gulf smelters were also present.
Kalban also said he was optimistic over the aluminium market because of expected demand growth in the Middle East, Russia and China.
The official gave a review of the two smelters making up EGA – Dubal and Emal – and said the company was taking care of future requirements in the upstream. He said the first phase of the bauxite mine development in Guinea would be completed by the end of 2017 while the alumina refinery in the African nation would be operational by 2022.
“We’re also excited over the Shaheen Project in Abu Dhabi.” said Kalban, referring to the plan to build an alumina refinery near the Emal plant. “The feasibility studies have been completed and approved. Phase 1 capacity will be 2 million tonnes per year with completion by 2017. Phase 2 will have capacity of 2 million tonnes and be completed by 2020.
Kalban recalled that the idea of investing in the upstream came some nine years ago when “we were at the control of suppliers.” Exploratory visits to places including India, Africa and Brazil, led to finalising an agreement in Guinea, one of the best bauxite markets in the world. There are also plans to introduce welfare programmes for the Guinean people.
He observed that most GCC smelters had value-addition to most of their production and noted that the premium was 22 per cent over the price. To stay competitive, EGA had a five-year strategic plan including consolidating the merger of Dubal and Emal, a process that has made good progress, and having a massive Capex plan, – $5 billion by 2020. “We have the investment to be strong and grow as one of the world’s top 5,” he remarked. Kalban also said Dubai had instituted projects to reduce costs, enhance technology and increase environmental performance. EGA was also pursuing a target to achieve zero harm to people and the environment. Towards this end it is focusing on the best available
Ma’aden Aluminium president Abdulaziz A Al Harbi said his company’s alumina refinery of 1.8 million tonnes would begin production by the end of 2014 and planning is underway for the start-up of a new line for the rolling mill. A caustic soda plant in the joint venture with Sahara would ensure a reliable chemical supply. He did not think coming to the competition at a late hour was detrimental to Ma’aden’s interests. “There’s a place in the market for everybody,” he said. Additionally, Ma’aden was a unique, integrated project, he emphasised.
Qatalum’s chief executive Tom Petter Johansen said a Phase 2 of the Qatar smelter had not yet begun because first there was the global financial downturn and then a situation where aluminium inventories were large – more than 12 million tonnes globally. He did not think the price increases in recent weeks were sustainable and the fact that there was a large aluminium inventory meant a decision to have an expansion had no urgency.
Sohar Aluminium chief executive, Said Al Masoudi, concentrated on Omanisation and skills building in his company. He said Omanisation goals were being met through a structured competence development programme that would encourage youths to join the company. The current Omanisation level is 72 per cent. Other elements in the strategy comprised upscaling the national workforce, building a training centre and ensuring that salaries and benefits are in line with those of other smelters in the region. He said the upscaling drive would enable operators, for example, to become maintenance technicians and help take the Omanisation level to 80 per cent.
But the challenges were retention of good talent, how to arrive at 80 per cent Omanisation, meeting people’s expectations and excelling in a competitive market. It would not be easy to retain good talent at a time when the oil and gas sector was booming in Oman. The way forward, he said, was to resort to cross posting, have a system of rewards and put in place a continuous coaching and training programme to develop and embed new skills.
He said one of the future plans would be to convert the training centre into a training institute with international standards.
Alba’s chief executive Tim Murray focused a great deal on human resources during his talk. “We are in the people business and 87 per cent of our staff is Bahraini. Developing people is critical. Our major concerns are safety and people.”
Murray also said women were being given more responsible roles. A woman was put in charge of training and another was posted to head the Middle East business – which comprises 70 per cent of Alba’s total business.
Much attention was being paid to develop soft skills. For higher training the motto now was “send the best even if it hurts” as trained staff would bestow significant gains in the long run.
Special emphasis was being paid to drive change including creating a reading culture (reading at least for 15 minutes daily), teaching teamwork and coaching, and exhorting people to dream beyond themselves.
Staff were also being encouraged to think like they were owners in order to create a business mindset. Organisational structures such as the various potlines, the casting facility and the power station were being run as business units. Owners of businesses are cautious about how money is spent. A similar attitude would prevail if staff viewed their units as businesses they ran.
Murray said it was important training went beyond the benchmark – creating a culture of education, developing the right team not just the best players and building capabilities for the next 10 to 12 years. “Money is not what motivates people, it is leadership. You acquire leadership by the power of example,” he said.
Murray commented that Alba’s cost-cutting programme named Project Titan (an initiative to cut cost by $150 per tonne by the end of 2016), recourse to maximising value-added production and upgrading people skills would help optimise the company’s operations.