x Abu Dhabi, UAESaturday 22 July 2017

EGA to expand operation in United States as American demand rises

The move comes ahead of an expected shift in the political mood in the US to a more protectionist stance when Donald Trump is sworn in as president next month.

Aluminium ready to ship at an Emirates Global Aluminium factory. The company is looking to take advantage of demand in the United States by opening a sales office in St Louis, Missouri. Jaime Puebla / The National
Aluminium ready to ship at an Emirates Global Aluminium factory. The company is looking to take advantage of demand in the United States by opening a sales office in St Louis, Missouri. Jaime Puebla / The National

Amid rising demand in the United States, Emirates Global Aluminium (EGA) said yesterday it is expanding its operations in America, where it has doubled its business volume over the past few years.

The move comes ahead of an expected shift in the political mood in the United States to a more protectionist stance when Donald Trump is sworn in as president next month. Mr Trump has pledged to revive American industry such as metals production at the expense of foreign manufacturers.

EGA, one of the world’s biggest aluminium producers, has opened a bigger office in St Louis in Missouri under the Dubal America name, after increasing its workforce five times since launching an office in 2014.

“St Louis has met our needs and after only a few short years, positioned us for growth,” Walid Al Attar, EGA’s chief marketing officer, said in a statement. “In order to meet growing US demand we’ve increased our workforce and doubled our business volume.”

The new premises, at 7,000 square feet, is double its previous space and will house its 25-member team “as well as provide space for future growth”, the company said. It has added nine positions in the past year at its US operations, which manages contract negotiations, sales and supply and deliveries for the aluminium manufactured at its plants in Dubai and in Abu Dhabi. EGA sells aluminium products used in US industries such as aerospace, building and construction, automotive and many other sectors.

Total US imports of aluminium rose by 8 per cent last year compared with 2014, with Canada ranking as the leading supplier, according to the US Geological Survey. Meanwhile, US smelters produced 1.59 million tonnes last year, 7 per cent less than in 2014 and 20 per cent lower than in 2011.

The fall in domestic production has prompted Mr Trump to pledge to resurrect the ­industry.

“We are going to put American steel and aluminium back into the backbone of our country,” Mr Trump said in a speech in January.

However, the prices of industrial metals including aluminium rallied after Mr Trump’s election win last month amid expectations of a potential increase in consumption on higher infrastructure spending under his watch.

Benchmark aluminium prices on the London Metal Exchange have risen by 16.7 per cent so far this year but are still down by about half from an all-time high of US$3,380 per tonne, reached in July 2008.

EGA, which has 300 global customers, is also expanding its operations in the UAE and in Guinea.

It is building a US$3 billion alumina refinery in the UAE, which is expected to be operational by next year and will be completed in two phases, each with an annual production capacity of 2 million tonnes.

In Guinea, EGA is building a $1bn bauxite mine, where it plans to start commercial production in 2018 and will later ramp up output to 12 million tonnes per year. The mine will be built by Guinea Alumina Corporation (GAC), an EGA subsidiary, and will supply EGA and world markets. GAC signed a 25-year mineral concession deal with Guinea in 2013, with the possibility of renewing it for another 25 years.

Bauxite is the aluminium ore processed into alumina, which in turn is processed into aluminium. Guinea has the world’s largest reserves of bauxite. EGA’s concession in Guinea contains more than 1 billion tonnes.

EGA, which was created by the merger of Dubai Aluminium and Emirates Aluminium in 2013, posted around a 50 per cent drop in net profit last year as the price of aluminium plunged amid a supply glut.

EGA is owned equally by the Abu Dhabi government-owned Mubadala Development and Investment Corporation of Dubai. The company has a production capacity of 2.4 million tonnes of aluminium per year.

dalsaadi@thenational.ae

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