$100m deal to set up aluminium plant

Abu Dhabi Basic Industries Corporation (Adbic) yesterday announced a $100 million (Dh367m) deal with Bahrain's Midal Cables to set up a joint metal-producing plant in the emirate's upcoming industrial free zone.

According to the deal, the aluminium rod and conductor plant will be set up at the upcoming Khalifa Port and Industrial Zone that is set to become Abu Dhabi's first and largest free zone with a number of industrial clusters.

The agreement to set up the plant was signed by Adbic Metals Senior Vice-President Jamal Al Dhaheri and Hamid Al Zayani, Managing Director, Midal Cables.

"The signing of the agreement serves to reinforce strategic partnership between the two companies," said Al Dhaheri.

According to Al Dhaheri, the joint venture for the aluminium plant is the first step towards the development of Adbic's upcoming metals cluster, which, he added, will play a fundamental role in expanding Abu Dhabi's downstream manufacturing capacity in the metals sector.

The plant will be set up in Taweelah, where the emirate's largest port is being developed to replace the existing Port Zayed, widely known Mina Zayed. Taweelah, the strategically located area between Abu Dhabi and Dubai, is also home to the emirate's largest power and desalination plants, as well as the largest oil and gas distribution centre.

Around these strategic assets will be a network of industrial zones under Abu Dhabi's 2030 Vision Plan.

Construction of the plant will begin in the first quarter of 2010 and may be partially operational by end-2011. No officials were available from either sides to comment on its exact completion period or the ratio of stakes shared between them.

"The establishment of this strategic partnership with Midal will be the first major milestone towards the expansion of Abu Dhabi's downstream manufacturing capacity in the metals sector.

"This partnership brings together the technical expertise of one of the world's largest manufacturers of aluminium rods and conductors with the experience of one of the leading industrial investment and development companies in the region," said Al Dhaheri.

The plant will produce about 150,000 tonnes of aluminium products per annum, including aluminium rods and aluminium electrical overhead conductors, to serve as feedstock to further Abu Dhabi's downstream industries and export internationally.

Al Zayani said the venture is strategically important for Midal Cables because of the high demand of world-class metal products.

He said: "The rapid industrial growth in the UAE and the GCC requires world-class expertise in the field of aluminium production. Working with a leading investment and industrial development company like Adbic further drives the growth of this key sector."

Adbic and Midal Cables also announced the signing of a memorandum of understanding (MoU) with Emirates Aluminium Company Limited (Emal) aimed at sourcing molten aluminium, the plant's main feedstock, from their new smelter.

According to Adbic, by the second quarter of 2011 it will be ready to receive its first batch of molten aluminium from Emal. Al Dhaheri said: "Emal will play a fundamental role in supporting the development of Adbic's metals cluster. This partnership will not only help drive Adbic's contribution to Abu Dhabi's industrial diversification, but also leverage Emal's planned aluminium upstream production capacity, which will commence at 700,000 tonnes per annum in the first quarter of 2010."

 

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