A study on a privatisation plan for Aluminium Bahrain (Alba) was among the surprise revelations of 2006 when the company had its first full year of the Potline 5 yield and made progress in penetrating the US and European markets.

Board chairman Dr Essam Fakhro said the study was in its final stages and an IPO could be issued in 2007 should the plan be approved by shareholders.
Commenting on the move, Alba CEO Ahmed S Al Noaimi said: “We are preparing ourselves in case a privatisation scheme is introduced. Alba is making itself ready just in case such an eventuality occurs. This is a matter for shareholders to decide.”
Al Noaimi was tightlipped about the quantum of shares being considered for privatisation.
The company is 77 per cent owned by the Bahraini government, 20 per cent by Sabic of Saudi Arabia, and three per cent by Breton Investments of Germany.
The smelter closed 2006 with a production of 851,000 tonnes. Targeted production for the new year is 853,000 tonnes. 
“We will continue with what we started in 2006,” said Al Noaimi. “Our concentration will be on the new markets of the US and Europe, without neglecting our existing customers who mean a lot to us.”
In 2006 the company allocated 45 per cent of the production to Bahrain companies with another 15 per cent going to GCC buyers. The remainder went to the wider Middle East, North Africa, the Far East, Europe and the US. The new Western markets accounted for 5 per cent of the output.
The quota to Bahrain companies was up 40,000 tonnes compared with 2005. In 2007, the plan is to allot them around 30,000 tonnes more.
Discussing company investments, Al Noaimi said there would be a “revision” of its strategy and business plans.  “At this stage, I would not like to state which route we’re going to take. We have to put our minds together. We’ll go to our board with our proposals from the investigations of all the opportunities as we take into account the long-term interests of the company.”  The options for consideration would  “not have any borders” and cover upstream integration or joint ventures with downstream companies. Dubal, the other operating Gulf smelter, has already taken a stake in an African operation, which will assure it of alumina supplies.
Part of the general strategy calls for stabilising and modernising the plant, which will entail a capital expenditure of BD60 million ($150 million).  Aside from minor upgrades in capacity, there will not be any expansion of the production capacity worth mentioning. The company will also be spending on its training centre and on upgrading its club.
Turnover in 2006 was $2 billion compared to $1.3 billion in the previous year thanks to additional capacity and prices still staying strong over a period of time. Alba expects its turnover in 2007 to be around the same.
Al Nuaimi says an important element in the drive to raise revenues would be the utilisation of the right amount of premium capacity, “taking into consideration our relations with the market and our customers.”
The official welcomed new capacity from new smelters in the UAE, Oman, Qatar and Saudi Arabia saying there was room for everyone with world demand growing at 4.5 per cent annually and aluminium still reckoned as a high-advantage product.
“Aluminium is an industrial product sold worldwide, irrespective of whether the plant is being built in Abu Dhabi or Venezuela. We are in perfect competition. The top managements of the new companies are acting very professionally. Although we are competitors, we do respect each other’s business plans and strategies,” he said.
“We have to make the existence of new plants in the Gulf our strength by having alliances and encouraging more dialogue. We do have a lot of co-operation including coordination in training and safety, information on markets and benchmarking.”
Alba’s own plans for another major expansion, namely Potline 6, are still on hold. “Until we know the situation on the gas and how long that will take I cannot say anything about when the project could start,” remarked Al Nuaimi. The plan is for Potline 6 to have a capacity of 320,000 tpy, around the same as the previous potline.
One of the new approaches of 2006 was direct sales, eliminating the need for middlemen. “Earlier, we used to deal with traders,” said Al Noaimi. “Although there are savings in the new arrangement, what’s important is the direct relationship with customers, understanding issues they face and giving them the service they want.”
Chairman Dr Fakhro observed that in 2006 the Alba marketing team had capitalised on buoyant market trends to set a new sales record of 900,000 tonnes by selling around 40,000 tonnes of inventory metal.'
Another significant development of the year was the completion of 6 million man-hours without a lost time incident, an achievement Dr Fakhro attributed to the “culture of safety” at the smelter.
An area where Alba has made remarkable progress is human resources. With a staff of more than 3,000 of which 89 per cent are Bahraini, Alba is among a few major Gulf companies to have such a high level of the local workforce. The Bahrainisation level in management jobs was also put at 89 per cent.
One of the significant occasions of 2006 was the presentation to Alba of the ‘Best Arab Organisation’ award. The presentation was made by Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Ruler of Dubai, during the fourth Arab Strategy Forum in Dubai last month (December).
Dr Khalid Jassim Bomtaia, manager, public relations, said the company was recognised for its clear vision and goals, integrated business strategy, the highest levels of customer service and encouragement to individual creativity among its staff.
The process of evaluation for the award was followed meticulously and there were strict criteria for selection, said Bomtaia.  The prize was the outcome of Alba’s pro-active approach and its policy to implement the highest standards in all its operations.