The Arabian Gulf’s only aluminium rolling mill plans to set up manufacturing subsidiaries in three aluminium-producing Gulf states on the heels of a joint venture it established in Oman

Dr Adel Hamad, chief executive of Bahrain’s Gulf Aluminium Rolling Mills (Garmco), says the company is in the process of raising funds for the rolling mill in Oman
The official also said plans to expand annual production capacity at the Bahrain rolling mill from 160,000 tonnes to 480,000 tonnes were “under review.” 
The company would use the continuous casting process for the expansion, work on which would begin, if approved, only after the plant of its Oman subsidiary was completed. Construction work on the Garmco Oman factory begins in the second quarter of 2009 with completion set for the first quarter of 2012.
Annual capacity at the Sultanate’s rolling mill will be 160,000 tonnes of coils and sheets. Garmco Bahrain has 45 per cent ownership in the venture with Oman’s Takamul holding a 30 per cent stake and Abu Dhabi Water and Electricity Authority 25 per cent. “Marketing, engineering and financial studies have been completed and the project is now in the fund-raising stage,” said Dr Hamad.  Investment for the plant is $300 million.
An aluminium foil plant is also planned to be built in Sohar by the shareholders of Garmco Oman. Work on the foil factory will begin much after the start of construction of the rolling mill but be ready at the same time as the rolling mill. Garmco Oman’s rolling mill and foil plant will be built as downstream to the Sohar Aluminium smelter which is now working at an annual capacity of 350,000 tonnes.
Dr Hamad said the Oman plant would share the burden of production at the Bahrain plant leaving the latter to concentrate on high-value products. Gamco Bahrain makes circles, sheets and coils in the series of 1,000, 3,000, 4,000, 5,000 and 8,000 with the 5,000 series commanding the highest price as it has special applications in electronic items and building constructions.

Exports and challenges
Garmco Bahrain exported in 2008 some 152,000 tonnes of coils and 35,000 tonnes of sheets to markets worldwide while 9,000 tonnes of circles were shipped to the Middle East, Australia and Europe.
The figures add up to more than the Bahrain plant’s capacity because the  products shipped included those  from Garmco itself and its subsidiaries in the US, China, Thailand, Australia and Singapore that sell not only imports from Garmco  but what is procured from the open market.
Garmco Bahrain has two manufacturing subsidiaries in the US as well as service centres in Australia, Singapore, Thailand, China and Korea where material comes in bulk and is cut and slit according to the requirements of customers. The Korea centre was added to the group in last November, and the Singapore facility fetches the highest returns, said Dr Hamad. Garmco has plans to open service centres in Japan, Canada, Morocco and Brazil.
Reviewing 2008, Dr Hamad said Garmco faced several challenges including high volatility in aluminium prices on the London Metal Exchange – from $3,300 per tonne in May to $1,450 in December.
“In the first three quarters of 2008, the company shipped 30 containers against 25 in the whole of 2007. But fourth-quarter volumes are down because of the global financial crisis.
The company expects a higher percentage increase in profits for 2008, the highest so far, which Dr Hamad says could be attributed to good management restructuring and optimisation of the opportunities available with market conditions.
He says containers were shipped in adverse circumstances. With congestion in terminals and strikes going on in many ports, shipments were dispatched to ports not affected by those problems and trucked to destinations.
“We reduced costs, improved products quality and sold more into booming markets than developing or declining ones.”
Garmco is targeting a 2009 output of 155,000 tonnes at the Bahrain mill against 160,000 tonnes in 2008 perceiving lower demand because of the economic crunch.
According to Dr Hamad, smelters are facing a 40 per cent decline in production, but Garmco would engineer products for maximum profitability while restructuring, reorganising and distributing resources to the best levels world wide distribution network.
“You have to look at the three areas, cost, quality and services and be benchmarked to be the best product manufacturer while adjusting production to ideal limits,” he said.
The main shareholders of Garmco Bahrain are the Bahraini government (Mumtalakat) (38 per cent), Sabic of Saudi Arabia (30 per cent) and Kuwait Industrial Bank (17 per cent). The remainder of the shares are held by Kuwait Investment Corporation, Iraq, Qatar and Oman.
The company was formed in 1981. The plant was constructed by Kaiser Engineering, USA, and machinery installed by Kobe Steel of Japan who also undertook the start-up operation and training of local staff at one of their aluminium plants in Japan.
The plant produced its first 20,000 tonnes of rolled aluminium in 1986. With expansions it has developed as the largest downstream aluminium facility in the Arabian Gulf region. Its fortunes have been tied to Aluminium Bahrain (Alba) from where it receives its raw material. As much as 26 per cent of Alba’s production of around 840,000 tonnes feeds Garmco.
The company has achieved the OSHAS 18001 and ISO9001 certifications.

Bahrainisation
In 22 years, Garmco has achieved a Bahrainisation level of 86 per cent which compares well with other major companies such as Bapco, 87 per cent in 75 years; and Alba, 89 per cent in 47 years.
Garmco’s training centre is staffed by Bahraini instructors who once worked on its shop floor. The centre also undertakes training for the aluminium foil company where 92 per cent of the staff is Bahraini.
The company recently received a Bahraini government award for being the best company in the kingdom for training.
Dr Hamad said employee turnover in Garmco was among the lowest in the Gulf and noted that the company’s staff who recently joined a stainless steel rolling mill in Bahrain wanted to return. “We basically create an incentive and motivational environment for employees to work, providing better pay, a safer environment, family-type social activities and generally greater job satisfaction,” the official said.