BUS-190517-Aluminium-Bahrain1-(Read-Only)
The Aluminium Bahrain (Alba) smelter in Bahrain. The current production of the firm is 1 million metric tonnes. Image Credit: Bloomberg

Abu Dhabi: High tariffs will not get in the way of Bahrain’s aluminium manufacturer to try and ship more to the US.

Currently, 15 per cent of Aluminium Bahrain’s (Alba) total production is exported to the US and the company is targeting to increase the number further due to higher demand for the metal in the United States.

“We plan to increase our sales in the US as we start a new production line in July and increase our production to boost exports,” said Tim Murray, Alba’s CEO, adding consumption of alumina is growing in the US in different sectors including in construction, automotives and aerospace.

1.5m

Planned output capacity at Alba (in metric tonnes)

He also said levying of tariffs by the US government has not affected the firm’s sales in one of the biggest markets in the world.

“US consumes about six million tonnes of aluminium but they only produce about 900,000 tonnes. Even with the tariffs, they still have to import all the metal. We did not see any impact on our sales in the US market and are hoping to grow further.”

The current production of the firm, which is listed on the Bahrain stock exchange, is 1 million metric tonnes. It is targeting to expand output to 1.5 million metric tonnes per year, with the starting of a new production line in July this year.

US President Donald Trump last year announced a 25 per cent tariff on steel imports and 10 per cent tariff on aluminium imports, citing unfair international competition in trade.

We did not see any impact on our sales in the US market and are hoping to grow further.

- Tim Murray, Alba’s CEO

A number of countries including the United Arab Emirates have taken up the issue with the US government to resolve the matter and get exemptions from the trafiff.

Sultan Bin Saeed Al Mansouri, Minister of Economy, told reporters in November that they are holding discussions with the top officials in the Trump administration on this matter.

“We will continue to go and explain our case because it is a very strong case. When it comes to the bilateral trade it is in favour of the US highly,” Al Mansouri said.

The UAE is the third-largest exporter of aluminium to the United States, after China and Russia and the state-owned Emirates Global Aluminium is playing an important role in the export of metal to different countries.

Murray also said they are planning to increase their exports to Europe and other countries in the Middle East.

10%

Part of Alba’s total production that goes to Saudi Arabia

Demand for aluminium is growing by about 3 per cent worldwide, he said. “In the region, the demand is better. If you look at the Middle East in general, consumption is good due to growth in construction in housing, infrastructure, among others.”

Saudi Arabia, which has opened up its economy for investors and boosting construction activity in leisure, housing and infrastructure projects is one of the key markets for Alba in the region, he added.

Roughly 10 per cent of the company’s production goes to Saudi Arabia and the number is expected to grow in the coming years.

“In the last eighteen months, it’s been good as Saudi Arabia is spending more on projects, schools, housing and universities. It is a key market for us and we expect to continue to grow.”

On acquisition plans, he said the company is looking to partner with some investors on the raw material side but did not disclose further details.

He also said 2019 is going to be a “tough financial year than last year as commodity prices in general are down”.