Alba to start $2.5bn expansion work by year-end
Manama, June 30, 2014
Alba's proposed $2.5 billion expansion to add a sixth production line is likely to start by the end of this year, the company's chief executive has said.
In an exclusive interview with the Gulf Daily News, our sister publication, Alba chief executive Tim Murray said the bankable feasibility study was almost complete and the project was now subject to approvals from the board and authorities.
The construction of a fifth power station will also be a part of the expansion, he said.
Next steps include finalising long-term contracts to secure gas supplies for powering the new line.
Murray said the project would take 36 months for completion from the commencement date.
Once the sixth potline goes on-stream, Alba expects to produce an additional 400,000 tonnes of aluminium a year, boosting current production capacity by 45 per cent to around 1.3 million tonnes.
"Line 6 will help us realise our ambition to remain one of the largest smelters in the world," he added.
The company is currently the fifth largest smelter in the world.
"The initiative will help Bahrain capture a significant portion of the aluminium value chain, creating many co-investment as well as employment opportunities downstream.
Alba's last major expansion took place in 2005 when it added a fifth potline at a cost of $1.7bn.
Bechtel, which is doing the feasibility study, was involved in that project too as the engineering, procurement and construction management contractor.
According to Murray, global demand for aluminium remains healthy and is expected to grow at an average of 5pc this year with emerging markets continuing to be the key growth driver.
"However, the market will be oversupplied and without further production discipline, prices are likely to struggle.
"The company is trying to lower costs to stay competitive internationally. This year, the focus is on leveraging strong physical premiums and accelerating our initiatives under 'Project Titan'," he said.
Started in February, Project Titan is a two-year efficiency programme aimed at reducing cash cost by $150 per tonne by end of January 2016.
Murray said the smelter will continue leveraging technology to streamline and modernise its operation in its quest to raise productivity.
Alba achieved a production record of 912,700 tonnes of aluminium last year and expects to better that to 920,000 tonnes this year.
The smelter is a key pillar of Bahrain's economy and contributes around 10pc of the national GDP, he said.
Nearly 88 per cent of Alba's 3,000 plus employees are Bahrainis.
About half the company's aluminium output in the form of billets, slabs, foundry alloys and molten metal, goes to the downstream industry in Bahrain.-TradeArabia News Service