GCC aluminium companies bank on productivity

Though aluminium producers based in the Gulf Co-operation Council (GCC) states are considered to have gained substantially from the region's abundant energy resources (primarily gas); producers themselves have a different story to tell.

Chief executives of aluminium companies based in GCC states – one of which imports gas and the other sources it from locally available abundant reserves – assert that productivity and marketing play a bigger role in their operations.

While the GCC region will add five million tonnes of aluminium capacity to its existing capacity by 2015, China, where energy comes for a much higher price, will add about four million tonnes per year for the next five years. "It's a question of demand," said Wan Ling, Senior Consultant (Aluminium) at metals and power analysis firm, CRU.

"At the moment our gas is being imported from Dolphin Energy (the UAE company that sources gas from Qatar). The feedstock story does not become difficult for us. The Oman government is able to bring gas to Oman at a competitive price and they make it available to us at a competitive price," Bruce Hall, CEO of Oman-based Sohar Aluminium told Emirates Business.

With gas being a preferred feedstock for aluminium smelters, Qatar with its huge gas reserves, established Qatalum, its aluminium producing company, to find local usage for its gas production. Jan Arve Haugan, CEO, Qatalum, said the company is banking more on production efficiency than on dependable gas supplies. "It's more a question of productivity than gas supplies. We are competing with the best in the field."

Salam Al Sharif, President and CEO, Sharif Metals International, says energy constitutes about 40 per cent of the cost of producing aluminium in smelters. This cost comes down to about five per cent if smelters use scrap metal instead of alumina, he adds.