Emal gears up for late 2010 launch

Abu Dhabi: Full-scale production at Emirates Aluminium (Emal) will begin in December 2010, its outgoing chief executive officer said on Monday.

Emal CEO Duncan Hadditch said construction of the company's first aluminium production facility will be completed next September and production trials will start early next year. Hadditch will then be replaced by Saeed Al Mazroui, former vice-president of Dolphin Energy.

Hadditch said he was leaving for personal reasons.

The first facility, which cost $5.7 billion (Dh21 billion), will produce 700,000 tonnes of aluminium products per year.

A second facility, expected to cost about the same, according to Hadditch, is under study and the board of directors is expected to reach a decision by the middle of 2010.

The second facility would double production to 1.4 million tonnes per year, the company said, making the project the largest single-site aluminium plant in the world.

"Phase two is part of the plan. It always has been," said Hadditch. "The issue is timing and that decision is with the board now."

He added the project faced financing difficulties when it was launched in 2007 because of the then sky-rocketing prices of building materials.

Prices have since dropped due to the global economic downturn, putting the company in a good position to continue its expansion plans, he said.

Emal already has two long-term contracts in place for exports of its eventual production to Europe, Hadditch said. The decision regarding the launch of the second phase will not be made based on current market conditions, he added.

"Market cycles are quicker than you can build a smelter," he said. "When you make a decision to get into this industry, you draw up a plan, position yourself at the bottom of the cost curve and go."

According to the Doha-based Gulf Organisation for Industrial Consulting, aluminium production in Gulf Cooperation Council countries is expected to account for almost 13 per cent of global production by 2020.

The six countries making up the GCC now produce about 2.2 million tonnes per year, or about six per cent of global output.

In the UAE, the largest producer remains Dubal whose output was more than 900,000 tonnes in 2008.