economy In the limelight – the Arabal conference 2013 The rise of the aluminium sector in the Middle East is one of the remarkable trends in this industry in recent years. Although production in the region only began in 1971, by 2020 smelters from the Gulf are expected to contribute nine percent of the world’s primary aluminium production. Recognition of the increasingly important role that the region plays is just one of the reasons why leading representatives from the industry will participate in the Arabal 2013 Conference. For the first time in its history this conference will take place in Abu Dhabi, from 5 to 7 November, with Emirates <strong>Alu</strong>minium (Emal), UAE, as the host. The Middle East’s premier tra<strong>de</strong> event for the global aluminium industry will both support the region’s position as a lea<strong>de</strong>r in primary aluminium production and showcase the advantages of doing business in the Gulf Cooperation Council (GCC). Arabal began in 1983 as a forum for the region’s producers to discuss matters of mutual interest. Over the past 30 years it has not only helped to strengthen ties within the GCC, but, reflecting <strong>de</strong>velopment in the Gulf, has grown beyond its regional origins, attracting international prominence. The growth of the aluminium sector in the GCC can be traced back to the early 1970s. In or<strong>de</strong>r to provi<strong>de</strong> economic diversity beyond oil and gas, governments in the region i<strong>de</strong>ntified aluminium as the metal of the future and began investing in the infrastructure nee<strong>de</strong>d to create a reliable source of quality primary aluminium. The first GCC smelter started production in Bahrain in 1971 and was followed by the establishment of Dubai <strong>Alu</strong>minium (Dubal) in the UAE, which began operations in 1979. In 2007 the UAE announced <strong>de</strong>tails of a second smelter for the country and Emal was created in Abu Dhabi. Oman’s Sohar plant started in 2008 followed by Qatar’s Qatalum the following year. The GCC currently has five smelters producing primary aluminium and another smelter in Saudi Arabia, the Ma’a<strong>de</strong>n Alcoa joint venture, near completion. These investments were based upon the region’s numerous strategic advantages, including its proximity to major aluminium markets in Europe, USA and the Far East. GCC smelters export around 80 percent of their total aluminium production, which highlights the importance of the GCC’s role in the global market. Strategic advantages of the Gcc region Port of the Khalifa Industrial Zone One of the strategic advantages is access to reliable and low-cost energy. In recent years energy costs for many producers around the world have increased, which makes the GCC an all the more attractive location. However, low energy costs are not the only reason why smelters in the Gulf are on the upswing. As there are recent investments in the region for expanding or building new smelters, the region is adopting the latest, highly efficient technologies, which provi<strong>de</strong>s another business advantage over competitors with ol<strong>de</strong>r infrastructure. Current primary aluminium production by GCC smelters is four million tonnes a year, which constitutes around 7.8 percent of total world production. With additional facilities set to come on stream over the next few years, production capacity in the region is set to rise to almost five million tonnes by 2015. And this trend is set to continue with forecasters estimating the GCC will be responsible for nine percent of the world’s aluminium production by 2020. Therefore, the region is in ‘pole position’ to take advantage of the forecasted six percent year-on-year rise in global <strong>de</strong>mand for aluminium over the next <strong>de</strong>ca<strong>de</strong>. However, GGC smelters are not only aligned to overseas sales. A major factor in the drive for economic diversification is <strong>de</strong>veloping the local downstream industry. The Gulf has access to huge regional and international markets: situated between Asia and Europe, advanced transportation links provi<strong>de</strong> ready access to around two billion consumers across four time zones. Projects, such as Abu Dhabi’s Kizad (Khalifa Industrial Zone), support the diversification of the local industrial base by establishing hubs for manufacturing, logistics and tra<strong>de</strong> for both local and international companies to take advantage of. Value is ad<strong>de</strong>d at every stage of the supply chain through efficiencies of scale, proximity and market access. Kizad is one of the world’s largest industrial zones and has ma<strong>de</strong> aluminium a focus for <strong>de</strong>velopment. Emal is one of the zone’s anchor clients and the proximity of Khalifa Port allows easy and quick movement of goods and raw materials. Kizad has also built the socalled Hot Metal Road allowing <strong>de</strong>livery of products directly from Emal to local companies. The downstream targets for Kizad are rolling and extrusion products as well as castings and forgings for industries such as construction, transport, packaging and engineering. The latest project is the Senaat / Ducab joint venture for aluminium rod. (For further <strong>de</strong>tails see News in brief section in this issue). By adding to the international profile of GCC countries, providing sustainable income, creating jobs and expanding the local economic base, aluminium is proving to be a major return on investment. This growing importance will be reflected at the Arabal 2013 Conference. Already recognised as a strong networking platform for the industry, it will attract global aluminium lea<strong>de</strong>rs with an agenda which will not only focus on <strong>de</strong>velopments in the region, but also provi<strong>de</strong> insights and perspectives from around the world. ■ © Kizad 24 ALUMINIUM · 11/2013
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