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Aluminium Manufacturing for the Digital Era

aluminiumLogisticsManufacturing

Punching above its weight

A country six times smaller than London might seem an unlikely site for one of the world’s largest aluminium smelters. But now that Alba (Aluminium Bahrain B.S.C.) – the Bahraini aluminium manufacturer and the first primary smelter in the GCC – has completed its $3bn mega-expansion, that is precisely what it will be. By 2020, Bahrain, a country of just 1.5m people will produce more than 2% of global aluminium output, a leap from +1m to more than 1.5m metric tonnes per annum, rendering it the largest smelter in the world outside of China. 

A modern metal

And in an increasingly digital world, the aluminium industry still matters while aluminium uses are evolving. For example, the global demand for electric vehicles is growing. According to Bloomberg NEF’s Electric Vehicle (EV) Outlook 2019 Report, over 2 million electric vehicles were sold in 2018, up from just a few thousand in 2010, and there is no sign of slowing growth. The report forecasts a rise in annual passenger EV sales to 10 million in 2025, 28 million in 2030 and 56 million by 2040. 

Growing demand

Fundamentals continue to be strong despite a slowdown in demand from the leading global consumer, China. Indeed, global consumption is set to grow by around 3% year on year – and by as much as 4% by some estimates. Intelligence provider Fitch forecasts aluminium consumption to increase to 78.6 million tonnes by 2028, thus increasing the need for global aluminium manufacturers like Alba

Geographical advantage

Being in the heart of the resource-rich Gulf region gives Alba a tremendous geographical advantage. Firstly, it is well placed to serve markets in both East and West in an era of constantly shifting geopolitics. Secondly, proximity to the markets of Europe, Southeast Asia and Africa means aluminium produced by Alba can be easily exported to more than 25 countries across the globe. Alba currently sells around 35%-40% of its products domestically in Bahrain, 20% to the EU, 15% to the Americas, 14% to Asia and 17% to the GCC. Customers can also be found in Morocco, Egypt and Jordan among others. Another key market for expansion is the US, where the aluminium manufacturer is actively seeking to boost its footprint given that the US is a net importer for the metal. Alba is also working to increase sales at home, with up to 50% of their products planned to go to the downstream cluster in Bahrain.

From MENA to the moon 

Alba’s clientele is as varied as it is international. It includes the largest extruders in both MENA – ALUPCO – and Africa – WISPECO.  Among its clientele in Europe, Alba serves Ronal, a global pioneer in light-alloy wheels and Cortizo the first manufacturer and distributor of aluminium and PVC systems for the architecture and industry sector in Spain. Across the Pacific Ocean, Alba’s clients include Hyundai Sungwoo Metal and Hands, Korea’s largest alloy wheel manufacturer. But its client base stretches even further than the far East – all the way into outer space! In 1997, Alba’s aluminium uses include producing the solar panels on the “Sojourner” rover used in the Mars Pathfinder spacecraft.

Transforming Bahrain

Back on planet Earth, the mega-expansion will be transformational for the Kingdom of Bahrain. Not only will it significantly boost employment opportunities for nationals (almost 83% of Alba’s 3,200 staff will be Bahrainis), but it will also present many co-investment opportunities through local and foreign aluminium projects in the Kingdom. The expansion of the aluminium industry has already encouraged the clustering of several downstream businesses in Bahrain and is set to attract foreign firms such as auto-parts suppliers with an interest in the Middle East.

Bold and nimble

The most recent World Investment Report from the UN Conference on Trade and Development found that despite worldwide FDI flows sinking to their lowest level since the global financial crisis, Bahrain saw a marked increase in FDI. The report attributed this to growing interest in the Kingdom’s manufacturing sector. Indeed, this industry is in a state of continuous growth and improvement, and Alba is one of its crown jewels. That one of the world’s smallest countries can be home to one of the world’s largest manufacturers is a testament to what a bold and nimble economy can achieve.