Gaining strength from its increasing production capacity and a leadership position in quality, Dubai Aluminium (Dubal), the pioneering industrial venture of Dubai, is now looking beyond the Gulf’s shores to further boost its presence in the global market.

Sharing the vision of the leaders of Dubai, the company is exploring available opportunities in upstream projects and investments abroad.
Talks are already at an advanced stage to invest in a joint venture alumina project together with Indian giant Larsen and Toubro (L&T) in the state of Orissa in India. A Malaysian investment is also being seriously discussed by the company.
“We have to be ahead of the game.” That’s all Abdulla Kalban, director of operations, will say about the new ventures as he prepared to catch a flight to India after an exclusive interview with Gulf Industry.
The year 2004 has seen the company increasing its profits by a record 40 per cent and it hopes to boost its capacity by 12 per cent to 761,000 tonnes before the end of this year.
Still a relatively young smelter, Dubal is one of the largest non-oil foreign exchange earners in the UAE and accounts for almost 7 per cent of Dubai’s GDP.
It is a major supplier of foundry alloy to the automotive industry in the Far East, a significant supplier of extrusion billets for construction markets and a preferred supplier of high-purity primary aluminium for use in the electronics industry.
“The future promises to be very positive and we are looking forward to beating 2004 profits and sales,” says Kalban. “Higher aluminium prices and aggressive marketing will help us do this.
“In the middle of 2003, we started working on our long-term strategy covering 10 years. The plan will look at both regional and international growth opportunities,” he says.
The 10-year strategy is likely to be ready by the end of March, adds Kalban.
The world aluminum market has seen record prices this year and unprecedented growth. “There is a growth of 3 to 4 per cent in the world aluminium market and that means about 1.5 million tonnes of new aluminium should come to the market and this offers scope for two or three new smelters.”
Kalban is confident that demand and price will remain strong for some more years.
“The current price is very good and we are predicting the same trend to continue for two more years. A range between $1,650 and $1,850 is healthy.”
Dubal has already commissioned SNC-Lavlin to conduct a feasibility study to examine the opportunities available for the company and come up with a roadmap for its future expansion. “We want Dubal to be the largest single-site smelter in the world with a strong international market presence,” says Kalban.
“At present we have a 3 per cent share of the global aluminium market. There are different opportunities within the region and outside. We have a very ambitious plan.”
Dubal has more than 300 customers in 42 countries. “We are marketing Dubal well and are proud that we have a good reputation. We would like to share our expertise and technology internationally and bring our leadership qualities to other parts of the world,” says Kalban.
Though demand outstrips capacity, Dubal takes part in all major conferences and exhibitions to promote the company and project its image and brand reputation.
The company is spearheading a movement to launch a Gulf aluminium association. “Our concerns are the same, whether it’s health, safety, the environment, the EU tax, energy issues etc. We want to educate people about aluminium,” adds Kalban.
Dubal’s success is built on the firm foundations of support from the Government of Dubai and full empowerment by the board. It has been able to attract the best workforce and has maintained a close relationship with its customers. The long-term contracts for supply of raw materials and the plant’s proximity to the Jebel Ali port have played a key role in Dubal’s continued progress.
About 7 per cent of Dubal’s production is supplied to the domestic market, while the company’s biggest single market is Japan, which takes 23 per cent of the company’s production. Europe as a whole accounts for 20 per cent (120,000 tonnes); the US imports 7 per cent of Dubal’s production and the Middle East 10 per cent. Other key markets are Korea, Taiwan, Indonesia and Malaysia.
There is demand for more quantity from local downstream industries. “They keep asking for more. We are trying to strike a balance between the domestic and the export markets,” says Kalban.
“However, the UAE is our market and we have to support the local industry. We are trying to satisfy their demands.”
Kalban continues: “Every year we meet our customers, all of them. Their business plans are discussed and requirements noted. Then we take a look at our capacity. We will always supply our loyal customers’ demands. We are keen to maintain relationships.”
Speaking on the company’s expansion strategy, Kalban says that it’s imperative that Dubal caters to its customers’ demands and further expansions will be considered. “Our customers are also expanding and we want them to remain with us and get the metal from Dubal. We can’t let our customers down.”
“We have a very aggressive marketing team. They travel a lot. All our customers are invited to the annual Dubai Desert Classic golf tournament and Dubal has been the main sponsor of this event for the last 14 consecutive years.”
Kalban sees a ray of hope in finding a solution to the long-pending issue of the European Union tax on aluminium. “We are making progress on this issue. It may take some time but we are optimistic.
“There is still resistance from some companies, but things are changing with the new energy situation developing in Europe and plans by aluminium majors to invest in the Gulf,” says Kalban.
Many Gulf states are in the process of setting up huge plants in tie-up with international majors. The Gulf is the prime place to set up an aluminium venture because of the availability of low-cost energy in abundance, the location and proximity to the Subcontinent and Asia and the skilled workforce.
“We are welcoming all the aluminium companies to set up smelters in the Gulf. This will give us an opportunity to join together and set up a powerful aluminium association, which will help us to market and promote aluminum industries. It will also strengthen jobs and Gulf economies,” says Kalban.
“Definitely such investments will have an impact on the market. But we will work together to make the Gulf an aluminium industry hub. We are well established, we have long-standing customers and I believe there will be room for everyone.”