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Dubai Aluminium (Dubal) and Emirates Aluminium (Emal) have announced the merger of their businesses to create a new entity, Emirates Global Aluminium.
“Emirates Global Aluminium will have an aggregate enterprise value of more than $15 billion and will be the fifth-largest global aluminium company by production, once Emal Phase II is completed in H1 2014,” the new company said in a statement.
Including Emal’s Phase II expansion plan – which will double its annual production capacity to 1.3 million tonnes – and Dubal’s capacity of about 1 million tpy, Emirates Global Aluminium will have a production capacity of 2.4 million tpy.
The joint company will serve over 440 customers in 55 countries.
“Building on the heritage of Emal and Dubal, the new company will look to expand along the value chain, from aluminium smelting to alumina refining and bauxite mining overseas,” the new company added.
The agreement includes the unification of Dubal’s Jebel Ali and Emal’s Taweelah smelter assets, along with interests in Guinea Alumina and Cameroon Alumina.
The formal beginning of joint operations is expected to take place by the first half of next year.
The deal more than doubles Abu Dhabi’s stake in the country’s aluminium sector, according to local media.
Current Dubal president and ceo Abdulla Kalban will become Emirates Global Aluminium’s ceo. Saeed Al Mazrooei, president and ceo of Emal, will become ceo of UAE operations.
Emal’s current chairman Khaldoon Khalifa Al Mubarak will assume the same position at the new company, while Saeed Mohammed Ahmed Al Tayer, vice-chairman of Dubal, will become the new entity’s vice-chair.
The aluminium industry in the Gulf region benefits from cheap natural gas, which accounts for about a third of aluminium production costs.
Energy costs for major producers per tonne of aluminium produced range from $255 to $368 in the Middle East, while in India, electricity prices range from $514 to $904 per tonne, according to market sources.
Carolina Guerra cguerra@metalbulletin.com Twitter: #!/cguerra_mb