Emirates create $15bn Aluminium company in merger
- His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and General Shaikh Mohammad bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and Chairman of the Executive Council, on Monday witnessed the signing of a merger agreement by Dubai Aluminium (Dubal) and Emirates Aluminium ((Emal) to form Emirates Global Aluminium.
The merger agreement, which was signed by Mubadala Development Company of Abu Dhabi and the Investment Corporation of Dubai, creates Emirates Global Aluminium, a jointly held company with equal ownership, The agreement will consolidate the businesses of Dubal and Emal.
The new company, with an aggregate enterprise value of more than Dh55 billion ($15 billion), will be managed by Abdullah Jassem Bin Kalban, President and CEO of Dubal, who will be Managing Director and CEO. Saeed Fadhel Al Mazrouei, president and CEO of Emal, a joint venture between Mubadala and Dubal, will be CEO of the UAE Operations. Both executives are veterans in the aluminium industry.
The new company will start joint operations within the first half of 2014 once all required approvals are finalised.
“Emirates Global Aluminium will build on strong foundations of leadership to become a major industrial champion and engine of economic development for our people,” said Khaldoon Khalifa Al Mubarak, CEO of Mubadala.
Mohammad Al Shaibani, CEO of Investment Corporation of Dubai (ICD), an investment arm of the Dubai government, said today’s announcement builds on what these two outstanding organisations have created and reflects the UAE’s long-term industrial strategy. Emirates Global Aluminium will also continue to attract downstream manufacturing and auxiliary businesses related to aluminium smelting and alumina refining as it grows, thereby creating additional job opportunities.
“Emirates Global Aluminium will accelerate employment; with 2,000 direct jobs being created by 2020 adding to more than 6,200 direct jobs already in existence,” he said. “We also conservatively estimate that a further 6,000 indirect jobs will be generated, delivering total employment of over 33,000 people by the UAE aluminium sector through the end of this decade.”
Emirates Global Aluminium will be the fifth largest global Aluminium company by production once Emal Phase ll is complete by first half of 2014, said Al Mazrouei, President and CEO of Emal.
“Emirates Global Aluminium will serve over 440 customers in 55 countries, with a joint production capacity of 2.4 million tonnes of aluminium per year on the completion of Emal Phase II in mid-2014,” he said.
Al Mazrouei added that the new company will first focus on the local market, then the regional market and the international market in terms of investments.
Bin Kalban, President and CEO of Dubal, told Gulf News that the new company extend operation from aluminium smelting to alumina refining and bauxite mining overseas.
“The new merger of the two companies will make the UAE number four in aluminium production and the company the fifth in production volume worldwide,” he said.
A new alumina refinery
Bin Kalban said that they are also mulling establishing an alumina refinery in Abu Dhabi.
“We are now studying the establishment of an alumina refinery at Khlaifah Industrial Zone of Abu Dhabi (Kizad) with a capital of Dh11 billion ($3 billion) by 2017,” he said.
He added that the UAE has investments in petroleum coke in China and that the new company will be relying on these international and local investments to expand further,” pointing out that they have future plans in the field of aluminium in the GCC region.
New management and board
Emirates Global Aluminium will be run by a board of directors to be chaired by Khaldoon Khalifa Al Mubarak, and Saeed Mohammad Ahmad Al Tayer, Vice-Chairman of Dubal, will be the company’s vice-chairman.
Sultan Al Jaber, Abdullah Jassem Bin Kalban, Khalid Al Qubaisi, Ahmad Yahia Al Idrissi, Abdul Wahed Mohammad Al Faheem and Khalid Al Bakhit will be on the company’s board.
Last November, Emal announced the successful financial completion of its Dh21 billion ($5.7 billion) Phase I project, and Phase II construction is underway with full production targeted for the fourth quarter 2014.
Demand to increase by 6 per cent
World aluminium demand is increasing by 6 per cent per annum. Representing 40 million tonnes of aluminium a year, demand is estimated to reach over 70 million tonnes by 2020. The GCC states’ production is expected to increase to five million tonnes by the end of 2014, when the Emal Phase II expansion and other smelter projects are completed.
“Almost 80 per cent of the aluminium produced in the region is exported to different parts of the world, firmly placing the Gulf in a prominent position to meet both local and world demand,” Al Mazrouei said.