Dubal has fast-tracked its expansion activities over the past few years

Following a series of accelerated expansions in the last five years, Jebel Ali’s prime manufacturing facility has reached a smelter capacity of nearly a million tonnes per year and has expressed a vision to become the fifth largest producer of primary aluminium in the world by 2015 by producing 2.5 million tonnes per year.

“Dubai Aluminium Company Limited (Dubal) currently ranks as the largest single-site aluminium smelter complex in the Western world, its main facilities comprising a 960,000 tonnes-per-annum primary aluminium smelter, a 2,400 MW power station, a large carbon plant, three casthouses and a water desalination plant with a capacity of 30 million gallons per day as well as laboratories and port and storage facilities.
 The company, which is wholly state-owned, was conceived in 1975 as a means to begin the process of Dubai’s economic diversification in order that the emirate would secure an income flow disconnected to the price of oil.
It was accepted that the diversification process would also create the impetus for growth of a value-added manufacturing base in the city, which in turn would create job opportunities for youths. Since its inception in 1979, Dubal says it has contributed measurably to these goals while simultaneously making productive use of the region’s energy sources to deliver consistent and reliable financial results.

Industrial flagship
Currently ranked as the seventh largest producer of primary aluminium in the world, Dubal also numbers among the largest contributors to the economy of Dubai and is widely regarded as the industrial flagship of the emirate.
The company has achieved steady growth in revenue and profits over the past 12 years or so, as evidenced by compound annual growth rates of 13.5 per cent and 9 per cent respectively, a Dubal statement says.
“Each year, the company contributes approximately 5 per cent of the country’s non-oil revenue (28 per cent of the manufacturing sector).  Dubal also contributes to the local economy indirectly through the inevitable ripple effects created by employment (by way of disposable income and individual career growth) and purchasing of goods and services from local suppliers. Almost 3,800 people are currently employed by Dubal, of whom 22 per cent are UAE nationals.”
To motivate young Emiratis, Dubal has organised training programmes and internships and takes part in career fairs.
Opportunities are also provided for school and college students to become involved in apprenticeships and introductions to work schemes, which often lead to full-time placement within the company. The resulting job creation produces a considerable indirect investment in Dubai’s economy.
With a view to stimulating the national and regional economies, Dubal sources a considerable amount of services and materials in the UAE and the wider Middle East region.
The construction component of Dubal’s expansion projects has been undertaken by UAE-based subcontractors. A series of six successive expansions has increased production capacity more than seven times over the years.
“Indeed,” says Dubal, “a policy to assign part of each expansion project’s budget to purchases from local contractors and suppliers has amounted to an overall spend of more than Dh1 billion ($272 million) since 2005 alone.”
Attesting to Dubal’s role in the industrial diversification and economic growth of the UAE, an economic assessment done by HSBC Bank Middle East Limited and released in July 2005, stated that the high quality of the company’s revenue and dividend stream has helped develop and build Dubai’s asset portfolio.
Several factors contribute to the maintenance of the high quality of these returns, the most important being the nature of the industry sector (multi-industry sources of demand, long-term relationships between producers and consumers backed by term supply contracts) in which Dubal operates, and the prudent (in terms of low gearing) management of the business.

Special features
Dubal highlights that a number of features set it apart from its competitors and colleagues:
Although fairly import-dependent, importing almost all of its raw materials, the company says it adds considerable value during the aluminium smelting process – ultimately resulting in the manufacture and export of a wide variety of aluminium products.
Being commodity-based, the aluminium industry is also cyclical in terms of periodic ‘ups and downs’ in commodity prices. Dubal emphasises it has minimised the associated revenue volatility by using financial hedging instruments effectively.
The production of primary aluminium is energy-intensive, which puts into focus initiatives for improvement in that area.
“At Dubal,” says the company, “new technology – much of it developed in-house – is continually introduced to lower energy consumption levels with simultaneous reductions in emission levels. As a result, the company achieves energy consumption levels that are consistently lower than its global peers.”

Community participation
Dubal has organised or sponsored important sporting and business events including the UAE Careers Fair; the Dubai Quality Group and the Dubai Human Resource Forum; the Ideas Arabia conference and exhibition; the annual Dubai Desert Classic, a world-class golf tournament sanctioned by the PGAS and which includes the ladies’ Masters event; the annual Dubai international horse-racing carnival; the annual UAE national jet ski racing competition with additional support provided to the world champion Nadir Bin Hindi; the annual Dubai International Arabian Horse Championship.
The company also provides financial support for diverse charitable organisations and is an active member of the Emirates Environment Group.