Alba has mounted an aggressive growth strategy to perk up its market footprint and meet market preferences while vigorously continuing to pursue initiatives to raise operational efficiencies and savings, its chairman told Gulf Industry as the company presented an upbeat outlook towards the close of 2011.

Mahmood Hashim Al Kooheji also expressed his understanding that construction work on the next major capacity expansion, Potline 6, could begin by the end of 2012, subject to board approval.

“Alba remains committed to expanding its global presence and meeting the stringent demands of quality conscious customers around the world and, as part of its strategy, we opened recently a new sales office in Hong Kong to tap into the demands of the emerging markets of Asia where we used to do business through agents,” said Al Kooheji. Months earlier the company had opened a new sales office in Zurich for the European market.

“To promote value-added products, Alba will pursue technical workshops to develop customer adoptions of new alloys. We have identified key prospects in all markets and are pursuing qualifications trials,” the chairman added.

Alba plans to install its sixth reduction line

Sales breakdown

In 2010, 49 per cent of Alba’s sales went to Bahrain’s industries. Asia accounted for 19 per cent, other Mena markets 18 per cent and Europe 14 per cent.  By product segment, billets accounted for 36 per cent of all sales, followed by liquid, 28 per cent, foundry and slab, 13 per cent each, and ingot 10 per cent.

About Alba’s sales to Bahrain’s downstream industry, Al Kooheji said: “Alba will always support its local customers in their growth projects as long as we can agree on a dynamic pricing reflecting our costs evolutions.”

Aluminium demand continued to be healthy with world market consumption growing by 10 per cent versus 2010 and aluminium being one of the less sector-dependent base metals, he observed. There was “solid demand in Asia despite the earthquake in Japan and increased industrial production in Europe while demand in the Mena region was being driven by investments in infrastructure.”

He added that new downstream facilities were expected to further develop local consumption.

Expansion studies

Alba was close to wrapping up studies on the expansion of its production footprint by the addition of its sixth reduction line that will yield a further 400,000 tonnes annually. “In order to secure an optimum solution for this project, we are currently considering various options for the long-term competitive sourcing of energy and the best smelting technology.” He added that bankable studies would be carried within 2012 and construction would start by the end of 2012, subject to the board’s approval.

Alba’s Potline 5 was completed in 2005

Alba produces more than 860,000 tonnes per year of aluminium which meet or exceed the industry standard for purity. Products include standard and T-ingots, extrusion billets, rolling slab, propertzi ingots and molten aluminiuum. The company has also maintained a strong track record of operational safety and environmental compliance.

Al Kooheji did not comment on whether it was conducting negotiations for stakes in companies producing raw materials with a view to securing its alumina requirements for the future.

About the campaign to cut costs, Al Kooheji said Alba remained determined to achieve a target of $170 million operational improvement in 2011 as compared to 2009. In 2010, it had achieved savings of $100 million. These savings came through implementing the operational performance improvement programme named Star.

In a statement after a board meeting at the end of November, Al Kooheji said: “2011 will be an exceptional year as the company succeeded in demonstrating its strength and resilience despite the challenging times and was able to exceed sales and production growth targets throughout the first three quarters of 2011.” He attributed the performance to its “skilled and remarkable workforce.”