GCC set to become aluminum powerhouse

 

 

Considering the fact that Maaden, a sixth smelter in Saudi Arabia is set to become operational by 2013 while Emal's robust expansion is scheduled for completion by 2014, the GCC is poised to become a primary aluminum production powerhouse with the expectation that the region will contribute to over 13% of the world's aluminum production by 2013.

 

 

Mr Mahmood Daylami secretary general of the Gulf Aluminum Council said that "Given the affordability of power and labor in the GCC region, the local aluminum industry as a whole is conducive to investment."

 

 

He said that increasing costs is becoming critical for more and more primary producers around the globe and therefore the Gulf presents a viable and attractive venue for investment in aluminum production across the entire industry's value chain. Furthermore, the GCC smelters are evaluating and studying future expansion plans to increase their global production contribution to a cumulative capacity estimated at 7 million tonnes per annum by 2020.

 

 

According to the Deloitte publication, the downstream aluminum industry within the GCC can be said to be underdeveloped, and therefore ripe for investment with an estimated 20% of locally produced primary aluminum is consumed within the GCC and 50% of locally utilized aluminum is processed further in secondary production and exported to international markets.

 

 

The Deloitte publication also points out that another significant opportunity exists to develop the aluminum recycling activity in the region. The cost advantages for industrial activity in the region coupled with increasing support and encouragement for investment in downstream aluminum operations create an attractive opportunity for investment.

 

 

Mr Firas Eid consulting partner at Deloitte Middle East said that "Although the regional aluminum industry is not without its challenges its close proximity to end user markets both throughout the Middle East and Europe is a strong advantage. Additionally, strong economic growth across the GCC, particularly in aluminum intensive industries, the most notable of which is construction will further fuel the region's growth in aluminum production and solidify the region as a global leader and pioneer in the industry."