Amidst the euphoria surrounding Aluminium Bahrain’s IPO and its listing on the Bahrain and London stock exchanges was a strong realisation that the smelter would have to build on its good first-half results by steering itself towards greater professional efficiency.

But the feeling was widespread that the IPO and the listing would have a very positive effect on the company’s performance and image. Alba expressed confidence it would surpass the first-half net profit of $200 million and meet and potentially exceed the targets it set for full-year 2010.

The company is also conscious that it is a flagship asset of the Bahraini economy and hence has been emphasising its commitment to remaining a strong producer.

Well before the public offering, the board had been discussing statistics, results and KPIs of the company and reviewing management reports on safety, operations, power stations, the supply chain and the capital expenditures plan for 2011. It announced it had made detailed marketing plans for 2011 to ensure the best revenues.

Also reviewed was the quarterly management report on the “Alba Star” project, which is aimed at reducing costs and increasing annual efficiency to yield savings of $250 million per year. The board had met with the company’s Bahraini officials who are leading teams responsible for implementing Alba Star.

Checking up on safety at the

Sapa deal
One of the important deals that Alba finalised in 2010 was a three-year pact to supply significant quantities of extrusion billets to the Sapa Profiles Group in Europe. Both companies had been working closely for several months to develop a strong business relationship on the supply issue.  Alba had fared well in a quality audit performed by Sapa and it now is one of the key suppliers to the European firm.

Sapa, a global leader in the core areas of extruded profiles, building and heat transfer systems, currently operates some 45 plants in Europe, North America and Asia and is regarded as the largest extruder in the world with a global capacity of more than 900,000 tonnes annually.

Alba continues to be a key player in the aluminium industry and today operates the world’s fourth largest single-site smelter with a capacity of 870,000 tonnes per year.

It produces the highest grade aluminium with products including standard and T-ingots, extrusion billets, rolling slab, propertzi ingots and molten aluminium. 

Alba’s state-of-the-art Casthouse 3 is one of the largest extrusion billet facilities in the world with a capacity of over 350,000 tonnes annually.

The country’s aluminium sector currently contributes 3 per cent of Bahrain’s GDP and includes a highly developed downstream sector comprising six major companies and over 500 medium and small enterprises.

The company has maintained a high track record in safety, continues to enforce strict environmental guidelines and has surpassed production targets set for different stages of 2010.

Alba’s voice in world aluminium forums continues to be a respected one. At the Arabal conference in Egypt, the gathering absorbed an analysis of aluminium prospects given by Alba’s management which forecasted that the Middle East would be an international hub for the metal long term. The view coincided with the observation of leading experts that the Middle East would grab nearly 14 per cent of aluminim production in the next four years.

The GCC region itself is a prolific producer. Alba produces 850,000 tonnes annually while Dubal in the UAE was expected to raise production to over a million tonnes by the end of 2010. Emal, the Abu Dhabi smelter will achieve capacity of 1.4 million tonnes annually by the end of 2013. Smelters of moderate capacities were recently set up in Oman (360,000 tonnes) and Qatar (585,000 tonnes) and both have expansions in mind while the Maaden-Alcoa complex will produce 750,000 tonnes in the first phase in Saudi Arabia.

Marketing focus
Anxious not to miss out on opportunities and keen to showcase its production quality, Alba took part in the China Aluminium Expo in Shanghai. And in another outreach, the smelter held an extrusion workshop in Cairo for its billets customers in Egypt, sharing its expertise built over 40 years.

The China fair brought together more than 10,000 decision-makers, buyers and influencers from 30 regions across China and 90 countries around the world. China is regarded as one of the largest consumers and producers of aluminium in the world and occupies a central role in the growth of the aluminium industry worldwide.

Alba’s commitment to expand its presence in Asia’s emerging markets is an integral part of its growth plans. One of the clearest evidence of that commitment can be had from the fact that Alba’s sales to the Asian region occupy nearly 25 per cent of its production, and the company is keen on developing this market further.

The Cairo workshop was conducted by a team from Alba’s marketing department and the first part of the exercise covered topics to assist customers in their understanding of the company’s processes for the production of high-quality extrusion ingots, alloys used for producing ingots and the characteristics of extrusion ingots required for optimum extrusion performance.

The second half dealt with the actual extrusion process and the practical aspects involved in obtaining productive and high-quality extruded products as well as the standards that apply to extruded products for end use in a variety of applications ranging from building and construction to transport.

Alba has earlier held similar workshops in Bahrain, Jordan and Saudi Arabia and said it planned to hold several more in other countries.

Production and safety marks
During the year, the company set production and safety marks. The casthouse team exceeded the planned production target of 110,000 tonnes per year of slabs, going 25,000 tonnes better to notch up a total of 135,000 tpy.

On the safety front, the Calciner and Marine succeeded in achieving 1.5 million work hours without a single lost time injury. To put this in perspective, the Calciner and Marine’s achievement amounts to an accident-free work environment for a total of five years.

The Casthouse also produced 250 tonnes of slabs in a single shift, far exceeding the average production figures per shift that revolve around 100 to 150 tonnes.  

Alba has regularly enforced rigorous safety standards throughout the plant, and these have earned the company global accolades such as the prestigious safety and occupational health awards from the Royal Society for the Prevention of Accidents (RoSPA) and the British Safety Council that Alba has won for three consecutive year. 

Alba is one of the very few smelters in the world that has its own calciner plant. It is the first of its kind in the Middle East.   

Also during 2010, Alba surpassed the monthly production targets set for 2010 in December 2009 for one of its best-value products, signifying another boost in operational efficiency.

Elaborating on the production record, the smelter said it achieved an output of 9,632 tonnes for its high-value foundry alloy ingots in December 2009, which far exceeded the monthly production plan for 2010.   

“Since foundry alloy ingot is one of Alba’s high-value products, this increase translates into higher profitability, and places the company on track to remain one of the most competitive smelters in the industry.”

The impact of Alba’s IPO and its listing on the Bahrain and London stock exchanges could be nothing but positive, Alba’s officials and industry leaders say.

With the listing, the Bahraini government is signaling to the world its commitment to private industry and transparency.

It is testament to the kingdom’s open economy and steady growth of the manufacturing sector, the Economic Development Board (EDB) chief executive Shaikh Mohammed bin Essa Al Khalifa said recently.

The development made explicit the country’s long-term strategy of economic diversification to grow the wealth of Bahrain and drive value creation in strategic non-oil and gas-related assets, he said.

The news will help Bahrain to continue attracting foreign economic investment from leading international companies, both to the Bahrain Stock Exchange and to Bahrain as the gateway to the rich potential of the trillion-dollar Gulf market,” Shaikh Mohammed said.

Alba chairman Mahmood Al Kooheji said the IPO and listing process was in line with the company’s strategy to support the kingdom’s Economic Vision 2030 to boost the private sector’s role in the national economy.