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Sat 30 Aug 2008 04:00 AM

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Aluminium: Endless possibilities

As an extraordinarily versatile material, aluminium can take on many forms and is available in a variety of surface finishes, which makes it a natural fit for the construction industry, reports Shikha Mishra.

As an extraordinarily versatile material, aluminium can take on many forms and is available in a variety of surface finishes, which makes it a natural fit for the construction industry, reports Shikha Mishra.

The world demand of aluminium is expected to reach 46 million tonnes by 2011 and 55 million tonnes by 2015. These figures indicate a long-term need for aluminium.

The GCC, along with China and Russia, are stepping up to the plate, with these regions slated to becoming centers of growth within the aluminium industry in the coming years.

Currently the region's two operating smelters are Dubai Aluminum (Dubal), which produces about 900,000 tonnes of aluminum a year, and Aluminium Bahrain (Alba), with a capacity of 860,000 tonnes. Another 11 smelters are either under construction in the planning stages in the Gulf.

Emirates Aluminium, or Emal, a joint venture between Dubal and Abu Dhabi's Mubadala Development Company, is building a 1.4 million tonne capacity smelter in Abu Dhabi.

The first phase of Emal is expected to be operational in 2010 and once the project is complete it will be the world's largest, single-site aluminium production facility.

Emal International has launched a similar capacity project in Saudi Arabia, while Saudi mining firm Ma'aden has its own smelter project.

In Oman, production at the 350,000-tonne Sohar Aluminium plant began this year. Currently, the GCC region accounts for 4% of global aluminium production and the share is expected to go up to 10% by 2010.

"Investments in the Gulf aluminium industry have jumped to US$8 billion (AED 29.3 billion)," says Reed Exhibitions Middle East's group exhibition director, Amanda Westerman, organisers of the Aluminium Dubai exhibition to be held in March 2009.

Recycling

According to statistics available from Dubal, nearly three-quarters of all aluminium ever made remains in use today, representing a growing "energy and resource bank" as the metal can be reused endlessly.

Aluminium in general has always been recycled at a higher rate than most other raw materials. Given the necessary infrastructure, it is possible to recycle all aluminium construction industry applications.

There is a relatively high level of scrap aluminium available and it has a high scrap value which can contribute significantly towards covering demolition costs. The infrastructure required for the collection of scrap metals is already well-established and will continue to grow on its own economic merit as it has done in the past to provide an increasingly efficient recycling system.

Quality concerns

In studies carried out by Jebel Ali based Gulf Extrusions, one of the region's largest extrusion plants, it was found that the quality of aluminium profiles used in the GCC housing projects was a cause for concern.

These independent tests showed various samples from external manufacturers that had failed to conform to requisite Aluminium Association (AA) alloy specifications.

"The problem of sub-standard aluminium profiles being used in building projects has reduced to some extent. But, in a price driven market such as the UAE, there will always be a problem with the quality of construction as developers are looking at materials that are fairly cheap.

Nonetheless, municipalities are stepping up, and stricter quality checks are being put in place," says Gulf Extrusions's director of sales and marketing, Robert Holtkamp.

Setting records

In line with Dubai's quest for setting construction-related world records, Gulf Extrusions, produced the biggest aluminium extruded supporting profile in Asia and Africa earlier this month. The specially designed profile is made of two pieces and weighs 30kg/m with a width of 1,000 mm with a total length of 80 cms."Production of this profile has begun and it will be used in Index Tower being built at the Dubai International Finance Centre which is slated for completion by the end of this year," says Gulf Extrusion's general manager, Modar Al Mekdad.

Challenges

The problem within the aluminium industry is to maintain quality and hire competent staff to do so. "It is difficult to find good labour at an affordable rate. The industry has to realise that they have to pay decent salaries to appoint and retain experienced staff," says Holtkamp.

The aluminium industry is also affected by the recent 30% rise in electricity and 60% rise in gas prices in the last few years.

"In principle, aluminium plants have a production capacity that is higher than demand. Most companies are not working on full capacity, so the demand is higher than supply," says Holtkamp.

"The reason for that is that all the projects are coming in at the same time. It's not just aluminium, even the steel and cement suppliers cannot handle the demands of the current construction boom," he says.

The price of aluminium in the Middle East is bound to the London Metal Exchange. At this time, aluminium prices are fairly stable, but have nonetheless doubled over the past five years.

"Aluminium has become an article for speculation. Companies have been buying it for huge amounts of money, so the price has been steadily going up," says Holtkamp.

Looking into the future

The future of the aluminium industry looks bright, with companies such as Danube Building Materials planning to invest $13.6 million towards aluminium and glass manufacturing by 2009.

The move is in line with the extensive growth witnessed in the aluminium market, with recent studies predicting that aluminium production in the UAE will cross 2.5 million metric tonnes by 2010.

In addition, the investment aims to capitalise on the steadily rising price of aluminium, which rose by 23% in the first quarter of 2008 in Dubai compared to the same period last year.

Recent studies have shown that the Middle East contributes 5% to the global volume of aluminium production; but this figure is expected to increase in the coming years based on the 42% growth in regional production.

"The booming construction and real estate industry continues to fuel our high expectations for the regional building materials market," says Danube Building Materials chairman Rizwan Sajan.

"We are directing our focus to address the demand in the market by providing a steady supply of high grade aluminium products from Belgium, France, Germany, USA, India, Indonesia, Taiwan, China and Bahrain."

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