Dubal confirms full production at cru 2009

Dubai Aluminium Company Limited (“DUBAL”) – the world’s largest modern smelter with a captive power station – continues to operate at full production capacity. This was confirmed by Abdulla J M Kalban (President & CEO: DUBAL), while delivering the welcome address at the 14th World Aluminium Conference, co-hosted by Commodity Research Unit (“CRU”) and DUBAL at the Grand Hyatt Dubai from 10 to 12 May 2009. DUBAL’s stance is bold, given the drastic cuts in production capacity among the world’s major aluminium producers since the onset of the current economic downturn. It is nevertheless a stance based on sound business sense, as Kalban explained. “Although DUBAL during the first quarter of this year experienced a 30 per cent decline in orders from our established global customer base, many of whom are engaged in the automotive and building industries that were hardest hit by the recession, we maintained our sale volumes on par with the prior year,” he says. “We have achieved this by establishing new markets for our metal, and changing our product mix to meet the needs of customers. This has resulted in our full production capacity being required to fulfil the orders – a scenario that will continue for the foreseeable future.” Kalban added that DUBAL’s status as one of the world’s environmentally-cleanest and lowest production cost smelters is not only a major competitive advantage in these difficult times, but an attribute that is being safeguarded through continual efforts to reduce DUBAL's cost of production in every area of the business. “I believe we should continue to produce at full capacity … to ensure that the smelters that have to shut down are the less-efficient energy users, usually with lower environmental standards,” he said. “It is for this reason that I also support the new smelters being developed or planned for the region.” In particular, DUBAL remains interested in the lucrative business proposition inherent in the green-field smelter developments planned in Saudi Arabia. “DUBAL and Mubadala have signed a Memorandum of Understanding with SAGIA and Emaar the Economic City regarding the possible development of a primary aluminium smelter at the proposed King Abdulla Economic City,” Kalban confirmed. “The project is currently still on the table: pre-feasibility and potential downstream industry studies have been completed, but the exact dates for the the project to progress to the next stage have not been set. Given the current economic climate, which has had an impact on all industrial sectors, it stands to reason that investors in large projects – such as this one – are watching global trends before making further time-bound commitments.” Kalban also restated DUBAL’s commitment to supporting the established and planned downstream aluminium industry in the gulf region. “Drawing on our experience over the 30 years of DUBAL’s existence, we believe that downstream business clusters can play a significant role in the regional aluminium industry and its economy. Indeed, investments in downstream manufacturing to feed mainly Middle East markets - with some international exports - have been, and continue to be, very successful,” said Kalban. “These businesses have developed a sound business model founded on added-value products, niche markets, local market development and technology. Given that the major aluminium consuming markets still have excess downstream manufacturing capacity, it is important that investments in downstream industry clusters adjacent to the upcoming new regional smelters are approached in a realistic, responsible way. Otherwise, the existing and soundly-established market in this sector could be severely damaged.” Overall, CRU 2009 was a resounding success. Acknowledged as ‘the world’s authoritative aluminium event for senior executives’, the annual event again attracted senior executives from the aluminium industry across the world in 2009. Approximately 250 delegates attended CRU 2009 to hear the thoughts and opinions of the high calibre, internationally acclaimed speakers who were also drawn from all corners of the globe. In keeping with the conference theme of future-proofing the global aluminium industry to ensure its future growth and sustainability, DUBAL’s Vice President: Marketing & Sales, Walid Al Attar, presented a keynote paper entitled “Gaining and sustaining markets for a gulf aluminium industry”, which gave the audience valuable insights into the sector dynamics in the Middle East. The agenda also featured presentations by other high profile individuals from the global aluminium industry, including Bernt Reitan (Executive Vice President: Alcoa and Group President: Global Primary Products USA); Pramod Suri (CEO Aluminium Operations: Vedanta Aluminium) and Hilde Merete Aasheim (Executive Vice President Aluminium Metal: Hydro). Objective opinion and analysis was provided by representatives of key institutions such as London Metal Exchange (“LME”, which sets the aluminium price), CRU and others; while the International Aluminium Institute (“IAI”) contributed valuable thoughts regarding factors influencing the sustainability of aluminium’s future. “Being the sector’s first major international forum following the start of the prevailing global economic recession, CRU 2009 was important an important event for the aluminium industry. I believe that CRU 2009 lived up to expectations: the delegates came with many business- and forecast-related questions in their hearts and minds; and went home largely reassured by the answers they received,” said Kalban. He added that the decision to host CRU 2009 in Dubai was of strategic importance to both DUBAL and the regional aluminium industry. “The Middle East is rapidly developing into an important an aluminium industry hub,” he explained. “Not only are several of the major global players already actively pursuing opportunities to invest in green-field primary aluminium smelter developments in the gulf, but also the new smelters will incorporate the latest generation technologies that are not only more cost-efficient than their older counterparts but also have less impact on the environment. These are vital ingredients for smelter viability, both during the current economic crisis and into the future. The convenient location of the Middle East at the proverbial crossroads between East and West, together with the abundant supply of natural gas as energy feedstock, is another huge advantage.” Naturally, the assembly of the CRU 2009 delegates in the city of Dubai also offered spin-off benefits to the local economy by bringing key decision-makers and influencers to the fast-growing cosmopolitan metropolis, thereby exposing them to the business, commercial, residential, tourism and leisure infrastructure on offer. “As the UAE’s industrial flagship, we take pride in showcasing our home to the world,” said Kalban. “It’s just one of the ways in which we not only support but also fulfil the directive of H H Sheikh Mohammed bin Rashid Al Maktoum (Vice-President and Prime Minister of the UAE, Ruler of Dubai) to raise international awareness of the UAE in a transparent way.”