Gulf Aluminium Rolling Mill Company (Garmco) has reported its new products have been well received by international markets and the company expects to raise production levels in the New Year after taking a hit from local unrest in 2011.

The company’s new products in the 8150 and 8011 alloys are used in the manufacture of foil products, semi-rigid containers, household foil, finstock and lidding.

“The potential is huge,” Garmco CEO Dr Adel Hamad told Gulf Industry. “Many customers are using these for making foil for the food industry and many have converted from the 3,000 series to these products.”

The Garmco plant in the Hidd Industrial Area

Dr Hamad said production of 8150 and 8011 alloys was in full swing and shipments were going worldwide. “These products have uses in nano solar technology and we’ve established business with Australia and the US for that application; there is potential to sell 1,000 tonnes,” he added.  Overall, exports of the new products amounted to 20,000 tonnes.

The company makes products in the 1,000 series, 3,000 series, 4,000 series, 5,000 series and 8,000 series. The 5,000 series alloys, which accounts for 40 per cent of production, has applications in the marine, electronics and building industries.

Garmco’s output in 2011 was 146,000 tonnes, 15 per cent of which was allocated for the local market, leaving around 124,000 tonnes for exports. In 2010, the company exported around 140,000 tonnes. Production in 2011 fell short of the year’s budgeted figure of 155,000 tonnes mainly because of a six-week factory disruption caused by a strike during the unrest.

Dr Hamad observed that from the market standpoint, the whole of the aluminium industry was suffering from the global financial crisis that started in 2008 and the debt crisis in Europe and the US. Consequently, he said, there had been a slowdown in aluminium flat roll production demand.

Output Expectations

The company expects to produce more in the New Year and is targeting 155,000 tonnes. “If there are no surprises – another strike for example – we should be able to meet that target,” he said, adding “we need to focus on stability – world market stability, political stability and social stability – and on demand and reliability of production lines.”

The product range comprises coils and sheets, circles and foil.

Garmco’s annual capacity of 165,000 tonnes will be boosted once expansions are completed. A third tension-levelling line will be ready in 2012 and will contribute 8,000 tonnes to the production capacity of circles, sheets and coils, while an expansion to the foil mill, scheduled for completion in 2013, will raise foils capacity from 20,000 to 28,000 tonnes in the first stage and to 35,000 tonnes in the second stage.

A project is underway to raise melting capacity from 75,000 tonnes to 175,000 tonnes by the end of 2012.

Investment on these projects will rise to $62 million.

Garmco is confident it will make a stronger impact in the US market in 2012. It has developed a marketing team which, Dr Hamad says, is more aggressive and will be able to penetrate segments from nano solar to construction. The company has two manufacturing subsidiaries in the US.

Concentration and calculations at the plant

Efficiency and savings drive

As well as developing markets for its new products, the company has launched a drive to raise operational efficiency and cut costs. The Business Processing and Performance Improvement team established in 2010 has been conducting studies across the gamut of operations and has recommended a number of projects which the company is implementing.

“Each project is standalone and each recommends the tools and amendments to achieve cost savings and process improvements,” said Dr Hamad. The team has so far identified up to 50 projects with some completed, some in the implementation stage and some not started yet.

“The team has improved processes and given us the motivation to produce more. Customer satisfaction is bound to increase because the effort relates to quality and it has in fact brought us different international awards,” said Dr Hamad.

“Our target is to achieve annual savings of BD2 million ($5.3 million). The team is handling its campaign as a continuous process and as a continuous journey. It is imperative to lower costs and improve quality.”

The team has identified areas where work could be outsourced or accomplished in-house. For example, the company used to outsource the manufacture of pallets but concluded recently that it would be cheaper if Garmco itself produced them. The pallets it now makes are unique for its requirements.

The company will also start producing paper core it used to buy earlier. But for its foil mill, it decided to buy steel core to reduce the consumption of paper core as it can be reused again and again.

This year Garmco introduced a new incentive scheme – Shift Performance Awards Scheme - for production personnel in all sections. It measures production per shift per area for a month and the best team of achievers is rewarded according to pre-set targets.

As a side line, it has consented to take on the sales and marketing responsibilities of Oman’s new rolling mill.

And in 2011 in a development the company calls a milestone, its board of directors approved the first payment of dividend to shareholders. It was 5 per cent of the capital invested.

The year also saw Garmco receiving the International Europe Award for Quality in March, the International Stevie Award in the eighth annual international business awards in October and the Golden Award for Excellence and Quality from the Arab League, in December. It became a member of the National Safety Council in October.

Meanwhile, Garmco is proud that the company has an 87 per cent Bahrainisation level, among the highest in Bahrain. It reached the level sooner than other major companies that have been operating for a longer period.