Dubai 2007 aluminium exports to Europe to rise 15%

Dubai's Dubal will supply 15 percent more aluminium to Europe in 2007 than it did this year to meet increasing demand, particularly from the construction industry, a senior official said on Wednesday.

Government-owned Dubai Aluminium Co Ltd (Dubal) exports of aluminium to Europe will reach 213,000 tonnes next year, said Khalid Essa Abdullah Buhumaid, Dubal's general manager corporate relations and international affairs. By the end of 2006, Dubal's exports to Europe will reach 185,000 tonnes.

"One thing we are sure about is that demand is growing, particularly in the construction sector and our exports to Europe will increase by 15 percent in 2007 to meet this demand," Buhumaid told Reuters in an interview.

Dubal has the capability to export to Europe up to 200,000 tonne per year, but the six percent duty on all aluminium imports from Gulf countries remains an obstacle, he said.

"But the European Union/Gulf Cooperation Council (GCC) free trade agreement negotiations are at the final stages and the agreement should be signed in the first quarter 2007," Buhumaid said.

He added that if the agreement is signed, the GCC would enjoy less tax or free entry for aluminum exports to the European Union.

Dubal's alumina imports come mainly from Australia, but it is looking for alternative suppliers.
"The company will import 1.6 million tonnes of alumina from Australia, its main source, and another 200,000 tonnes from other sources," Buhamaid added.

As well as exports, Dubal is banking on demand from the construction industry in the world's biggest oil exporting region where more than $1 trillion worth of infrastructure projects are in the pipeline.

Dubal produced 761,000 tonnes of aluminium in 2005, used mainly in construction, transport and the electrical industries.

Last month, the company inaugurated two new potlines in Jebel Ali in Dubai in order to raise its output by 13 percent to 861,000 tonnes by the end of 2006.

"Our current expansion in Dubal's Jebel Ali will add 60,000 tonnes annually to our production by 2008, so by then we will produce 920,000 tonnes," Buhmaid said.

"This will make Dubal the largest single smelter in the world after Russia."

Dubal is also targeting joint ventures with low cost alumina producers in order to protect itself from price fluctuations.

Last year, the company signed a deal to buy 40 percent of the output of an alumina refinery to be built by Canada's Global Alumina Corp in Guinea.

The 2.8 million tonne per year refinery is expected on stream in late 2008, and the deal will ensure Dubal sticks to its expansion schedules.

"Dubal is also involved in very advanced negotiations with government entities on two different opportunities in two countries to set-up greenfield smelters (each produces about 700,000 tonnes a year," he added, without giving details.

Dubal's only competitor in the Gulf Arab region is Aluminium Bahrain (Alba) with a capacity of 830,000 tonnes a year.

Last year, Dubal unveiled plans for a $6 billion aluminium smelter complex to start operation in 2010. It will eventually have an annual capacity of 1.4 million tonnes, making it the largest of its kind in the world.