The company faces low demand but has managed to stay competitive through plant optimisation and increased productivity while uncertainty looms
Aluminium powder maker Bahrain Atomizers International (BAI) faces uncertain times in the aftermath of a 400 per cent increase in premium that Alba charged for its metal from the beginning of 2015.
General manager Tim McLaughlin said the company kept to its strategy of staying competitive through increased productivity to mitigate the impact of Alba’s high premium.
“However, there’s been a softening of the market. A lot of our customer demand has decreased.”
The company optimised its plant and increased throughput while maintaining the same head count, but subsequent to that there was a drop in demand, he stated.
“Production in 2015 was similar to the 2013 level – less than 8,000 tonnes. In 2013 we were limited by production. Now we have more capacity but decreased demand,” observed the official. In 2014, BAI’s output was around 8,800 tonnes, the improvement coming from the opening of its second automatic line, Atomiser 2, which had not been operating since mid-2012. The company had also installed new mixing equipment which gave productivity enhancements as well as safety and environmental improvement.
Turnover was $25 million in 2014 against $22 million in the previous year. The figure for 2015 is approximately $22 million. However, Atomiser 2 did not have a long run and the plant is once again idle and can be re-opened if needed, said McLaughlin.
The official had predicted a gloomy outlook at the beginning of 2015 and expected to gain from capacity made available by the closing of a company in the US, the expectation materialising. “It went in our favour but it would be difficult to quantify the actual increase in business because of various factors at play,” he commented.
BAI also hoped at the beginning of 2015 that a trend in favour of niche products using aluminium in powder metallurgy applications, such as in automobile parts, would maintain its momentum. “It is difficult to say if that happened. Our volumes for automobiles have not decreased. It’s also difficult to say whether we had the same share of the same volume or a bigger share of a smaller volume,” McLaughlin said.
The chemical sector accounts for 50 per cent of BAI sales , metallurgy 30 per cent, refractories 15 per cent and pigments 5 per cent. The distribution pattern was generally similar to the one in 2014 with the US as the single largest market, accounting for 25 per cent, Europe and India each making up 20 per cent, Japan accounting for 10 per cent and other Asian states 15 per cent. Markets including South America and South Africa contribute to the remaining share.
India has traditionally been a strong market for BAI, the Bahrain firm enjoying favour with buyers there even though India has aluminium powder facilities. BAI’s better quality is cited as the reason for the preference.
BAI has not been successful in the Gulf market because of an absence of plants using aluminium powder in their processes. Year 2015 was unchanged in the region with Saudi Arabia taking less than 5 per cent.
With uncertainty looming large, McLaughlin surmised that people seem reluctant to make contract decisions including the traditional suppliers. While production capacity of aluminium powder has risen internationally, there have been no new players in the atomiser industry
BAI, part of the global Ecka Granules Group, has specifications for more than 100 grades but generally produces just 40.