Bahrain-based Capivest has announced plans to set up a $1 billion company aimed at building the first-of-its kind Magnesium Smelter, meeting global environmental standards in the Middle East and North Africa (Mena) region.

Capivest has signed a strategic alliance with TRU Group, an international technical advisory team with extensive experience in engineering, planning and managing technology-intensive industrial projects to oversee the technical and engineering arm of the company.

The project also entails future plans to build multiple environmentally friendly magnesium smelters in different locations, which will provide another steady income stream for the Mena region.

The magnesium alloy market continues to show strong signs of growth potential, with auto manufacturers in particular seeking lightweight yet durable solutions that comply with increasingly stringent environmental standards.

The Capivest Magnesium Smelter built by the company will produce pure magnesium metal and its downstream for high-quality magnesium alloy casting, magnesium extrusion, and magnesium die casting.

These end products are most notably used by aluminum smelters, the automotive and aircraft industries, and in the alloys for the production of aluminum for various usages.

Bankable feasibility studies have already been completed to construct and operate this world-class magnesium smelter in the Mena region, with an initial production capacity of 30,000 to 60,000 tons per year.

The company is yet to decide on the exact location. Preliminary discussions are also underway with international partners identified to subsidize the technical equipment needed immediately for components of the magnesium smelter, said a company official.

Due to significant advances that have been made in technology and equipment to reduce greenhouse gas emissions from the magnesium industry, Capivest is confident that all aspects of this project will meet stringent environmental standards observed internationally.

Commenting on the strategic move, Capivest CEO Nabil Hadi, said its approach was to always look for novel investment opportunities having the potential to contribute to the development of regional economies without harming the environment, which also offer 'our investors high returns on their equity.'

'The magnesium industry is still somewhat an unchartered territory in the region, so we feel there is a huge potential for this company Capivest will establish.” Hadi noted.

“Collaborating with TRU Group was important for this project, because we wanted to have a highly-specialized and dependable team of advisors with international experience committed to working with us through the long haul,' he added.-TradeArabia News Service