Aluminium giant EGA scripts home-grown success story

dubai - Industrial champion is expanding upstream and downstream to become an integrated producer

From an ambitious beginning, Emirates Global Aluminium (EGA) has become a global leader in aluminium production. Now, the UAE industrial champion is preparing for a dramatic leap forward in growth as it expands upstream and downstream to become an integrated producer focused on innovation and sustainability. Its rise has many lessons to offer other industrial giants in the region.

Four decades ago, the UAE leaders had an ambitious vision to kick-start the country's industrial development. As a major part of this strategy, we broke ground on our Dubai operations in 1976 and the first smelter pot was activated in 1979.

Initially, it may have been thought that the UAE's intention of taking a global leadership position in aluminium manufacturing was as unlikely a vision as transforming Dubai into an international tourism destination. Four decades later, both these visions have been realised and the rise of EGA looks prescient, as aluminium has become the world's 'go-to' metal due to its strength, lightness and near-infinite recycling capability.

Today, EGA's two UAE operations sit just a few miles from Dubai Marina and the world-scale Khalifa Port of Abu Dhabi, with additional facilities as far afield as China and the Republic of Guinea. We are taking our place as the latest industrial champion in a country rapidly diversifying away from the petrochemical sector to more value-added markets.

The EGA has helped the UAE to become the world's fourth largest aluminium producer, competing in global markets and serving an important role in building sustainable industry and economic development. It produces more than 2.4 million tonnes of aluminium per year, contributing two to three per cent of the UAE's non-oil gross domestic product (GDP), while the UAE's domestic aluminium sector employs between 27,000 and 30,000 people.

Two facilities
EGA's core operations are the Jebel Ali operation in Dubai, one of the world's largest single-site primary aluminium smelters, and the Al Taweelah operation in Abu Dhabi, the world's largest single-site primary aluminium producer. The company is renowned for maximising the health and safety of people and the surrounding community, reducing operational environmental impact and investing in social and economic development.

Together, the two operations manufacture high purity aluminium in the form of ingots for high-precision use in the electronics and aerospace industries. They also produce a range of alloys for automotive manufacturers, where they are used for strong and lightweight items such as wheel rims, suspension parts and engine blocks.

Our products have historically been used in solid form, but by the end of this year, we will begin supplying some of our customers in Al Taweelah with molten liquid metal. By supplying liquid metal to our customers, we will help reduce their energy consumption and costs.

Most of EGA's annual production is value-added products, with about 90 per cent of total production being exported across the world. The company's key markets are Asia, the Middle East and North Africa, Europe and the Americas.

Controlling value chain
Today, EGA is making considerable leaps to ensure that it protects its future growth by becoming an integrated aluminium producer able to control its processes from mine to metal.

Historically, EGA has focused on primary aluminium production from two smelters in Dubai and Abu Dhabi. But as with every other global business, we've identified the need to control key parts of our value chain.

To do this, we have begun developing a bauxite mine in the Republic of Guinea in West Africa. Bauxite is the main mineral from which aluminium is derived. Our concession contains more than one billion tonnes of some of the highest quality bauxite in the world and we will have a production capacity of 12 million tonnes per annum, starting from 2018.

As well as securing high-quality bauxite for our production facilities in the UAE, the mine will also give us a substantial new revenue stream from exports of bauxite to Asia. It will also make a significant contribution to Guinea's GDP and highlight the country's emergence as a global investment destination.

In the aluminium production process, bauxite must be refined into alumina, which is the raw material used in our smelters. To that end, we have also begun construction of the UAE's first alumina refinery adjacent to our operations in Al Taweelah. The refinery will produce two million tonnes of alumina each year, reducing our dependency on alumina imports by more than 40 per cent.

Alumina capacity
Once complete, Al Taweelah Alumina will cater to more than 80 per cent of EGA's alumina requirements, placing the company in a powerful position to compete on the world stage.

Al Taweelah Alumina will also contribute substantially to the UAE's economic diversification by accelerating the development of the aluminium cluster in Kizad and increasing the socio-economic impact of industry through job creation. It is envisaged that phase one will add Dh1 billion to the UAE's annual GDP.

By investing in these upstream assets, EGA is giving the UAE strategic control of aluminium production, ensuring that it controls supply in all steps of the process. And as EGA expands upstream and downstream to become an integrated producer, this dramatic leap forward in growth will also enable lower costs and efficient and sustainable production.

The writer is executive vice-president, upstream, at Emirates Global Aluminium. Views expressed are his own and do not reflect the newspaper's policy.