Groundbreaking for the $55 million remelt plant of Bahrain’s Gulf Aluminium Rolling Mills Company (Garmco) was held on Thursday near the company’s main production facilities.

 

The project, due for completion by November 2017, is part of a three-year programme that aims to increase profitability and grow opportunities for the company in regional and international markets.

 

Present at the event were Bahrain’s Minister of Industry, Commerce and Tourism, Zayed Al Zayani, and the French Minister of Foreign Trade, Mathias Fekl.

 

The plant, for which France’s Fives has the EPC (engineering, procurement and construction) contract, will produce 120,000 tonnes of aluminium slabs and create around 50 new jobs while generating significant cost savings and further bolstering Garmco’s position as one of the main employers in Bahrain.

 

Jean-Baptiste Lucas, chief executive of Garmco, said the turnkey project was highly anticipated and would be central to the company's entire operations.

 

“The project goes in line with our strategy to become a regional leader in aluminium recycling as well as further building its capability to reach across global markets in collaboration with world-class partners,” he said.

 

Fives’ chief representative in the Middle East, Francois Pahmer, said the contract was important for his company.

 

“Fives had mostly been known as a technology partner for the smelters while our activities do span both primary and secondary aluminium production. It’s a great opportunity to showcase our capabilities in this field, even more so that it happens in Bahrain, a strategic country for our aluminium business.”

 

Pahmer said the project is important for two reasons: firstly it is based on the concept of recyclability of aluminium and secondly it is state-of-the-art, “which is not always the case with downstream industry in the Gulf.”  Equipment at the Bahrain plant would be “first class and top-notch” with a low environmental footprint and low energy consumption, thereby decreasing the cost of operations and improving Garmco’s competitiveness.

 

It would make Garmco more environmentally friendly and push value addition, he said.

 

Pahmer also said that while the region made huge capital investments on smelters it had been exporting scrap aluminium at low prices.

 

Fives, an industrial engineering group with a turnover of 1.5 billion euros ($1.62 billion) in 2014, has a presence in various sectors including steel, glass, automotive, aerospace and energy, besides aluminium.

 

Minister Fekl described the remelt expansion as a strategic project and said both Garmco and Fives were famous for what they were doing.

 

Fekl said the contract was very important for Fives which since 2003 had installed more than 50 furnaces in the region with integrated casthouse solutions.

 

Production capacity at Garmco’s main mill in Bahrain is 160,000 tonnes annually while its foil mill can produce 20,000 tonnes. The sales turnover in 2014 was approximately $450 million, but both sales value and production in 2015 were down by around 10 per cent at a time when LME prices were still weak.

 

Garmco ships some 75 per cent of its output to markets outside the GCC region. In 2015, the US contributed around 20 to 25 p - er cent of total sales, the best-yielding market.  The Middle East was next with a share of eight to 10 per cent.

 

But Southeast Asia and Europe slackened somewhat, chief executive Lucas had told Gulf Industry magazine, a sister publication of Tradearabia,  recently.  “Competition from China was quite strong in Southeast Asia, and overall demand was slow in Singapore and the region as a whole.  Europe, too, disappointed to some extent, not because of demand but mostly because of currency. The euro being weak and the dollar growing stronger, we had competition. We lost market share even though demand was good,” he explained.

 

Lucas described 2015 as a year of significance with the revamping of its subsidiaries, staff restructuring, new management and the launch of the casthouse project.

 

He said Garmco is exploring the possibility of setting up a new subsidiary in Vietnam through its Singapore office. The proposed subsidiary would be established in partnership with Japan’s Mitsui and have a processing centre for coils and sheets.

 

Another project under consideration is the opening of a service centre in the Middle East. The site has not yet been decided but could be located in Saudi Arabia or in Bahrain.-TradeArabia News Service