Abu Dhabi's Adbic-Midal Joint Venture to Build $100 Million Aluminum Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Abu Dhabi Basic Industries Corporation (Adbic) (Abu Dhabi, United Arab Emirates), an industrial development and investment company wholly owned by state-run General Holding Corporation, has formed a joint venture with Midal Cables (Manama, Bahrain) to set up a 150,000-ton-per-year aluminum manufacturing plant in the upcoming Khalifa Port and Industrial Zone near Abu Dhabi.

The project is estimated to cost about $100 million. Construction is scheduled to commence in the first quarter of 2010, with the plant likely to be commissioned by the second quarter of 2011. The plant will be built in Taweelah, which is strategically situated between Abu Dhabi and Dubai. The plant is designed to have a capacity of 150,000 tons per year of aluminum products, such as aluminum rods and electrical overhead conductors. Output from the plant will primarily aid the development of Adbic's downstream industries, while the remainder will be exported.

Adbic plans to leverage Midal's expertise as one of the world's largest manufacturers of aluminum rods and electrical conductors through this strategic partnership. The Gulf Cooperation Council region, and United Arab Emirates in particular, is experiencing rapid growth in the construction and industrial infrastructure sectors, leading to an increase in domestic metal consumption. Hamid Al Zayani, Managing Director of Midal Cables, said that the company would benefit from this alliance as the sector offers tremendous potential for growth in the region. The absence of a major player in the sector in this region works to the advantage of Midal, a market leader in the manufacture of aluminum rods and conductors.

The Adbic-Midal joint venture recently signed an agreement with Emirates Aluminum Company Limited (EMAL) (Abu Dhabi) for sourcing molten aluminum, the plant's primary feedstock, from the second quarter of 2011. EMAL, a joint venture of Dubai Aluminium Company Limited (Dubai, United Arab Emirates) and state-owned investment company Mubadala Development Company Limited (Abu Dhabi), is currently setting up the world's largest single-site aluminum-smelter complex. The project is being implemented in two phases, and the smelter is expected to be fully operational by January 2011. Phase I is scheduled for completion in April 2010. The plant will have a production capacity of 700,000 tons per year of primary aluminum products at the end of the first phase and 1.4 million tons per year on completion of the second phase of the project.

As part of its vision for 2030, Abu Dhabi is striving to diversify its economy. The plan focuses on developing the emirate's primary metals industry and boosting its downstream metals manufacturing capacity to cater to regional and export markets. The global metals sector is reportedly worth $1.47 trillion per year and is projected to grow at the staggering rate of 19% per year in the short term. Abu Dhabi has launched a program to develop a metals cluster in the Khalifa Port and Industrial Zone at Taweelah. The industrial cluster will produce base metals such as steel, copper and aluminum. Adbic's proposed aluminum plant is the first step towards this initiative. EMAL will play a significant role in supplying feedstock for the development of this metals cluster.

Although United Arab Emirates does not have vast reserves of mineral ore, other benefits such as large amounts of oil, low energy costs, easy access to ports for export purposes, availability of skilled labor and good industrial infrastructure make metal production an economically profitable business in the region. Abu Dhabi is developing the country's largest port in Taweelah to replace the existing Port Zayed. Some of the largest water desalination and power plants and oil and gas distribution networks are located in the region.

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