Alba seek USD 250 million savings from 2012

Bloomberg reported that Aluminum Bahrain is seeking to save USD 250 million annually from 2012 after reducing its workforce and increasing capacity.

Mr Laurent Schmitt CEO of Alba said that company saved USD 100 million last year and will raise the figure to USD 170 million in 2011. We target an annual saving of USD 250 million from the end of 2012.”

The company, with 870,000 tonnes of aluminum capacity a year is seeking to expand by about 50% by 2015 to meet growing demand and take advantage of 24% increase in prices in the past 12 months.

Mr Schmitt said that Alba is studying options to build a line that will produce 400,000 tonnes and lift the performance of 2 current lines adding another 80,000 tons. We will submit our recommendations with investment costs to the board of directors at the end of 2011 or beginning of 2012. The ideal solution would be to do both. A new line would take about three years to build.

He said that demand is rising about 6% annually and world usage is expected to be 42 million tonnes in 2011. This means you need 2.5 million tonnes additional capacity every year so there’s a possibility for a new extension project every year. Aluminum producers will lift capacity in China, the biggest consumer of the metal and in areas where energy costs are low such as the Middle East, Russia and India.

Mr Schmitt said that Alba is expanding European sales to 15% of the total in 2011 from 10%. It opened a marketing office in Zurich to tap the European market, where demand mainly from carmakers is rising. Alba sells 45% of its output to Bahrain, 20% to the Middle East and North Africa and 20% mainly to Taiwan, South Korea and Malaysia.

He said that the company which grew sales volumes 8.2% in the Q1 from a year ago will achieve higher output and sales this year. The company employs about 2,700 workers, down from 3,000 in 2009 and is selling more-profitable products.