Mumtalakat signs agreement with India's Synergies Castings Ltd; will construct alloy wheel manufacturing facility in Bahrain
Mumtalakat and India's Synergies Castings will build a $150 million downstream aluminium facility in Bahrain, the chief executive of the kingdom's sovereign fund said on Wednesday.
The aluminium casting and specialty alloy wheel manufacturing plant, will take around 18 months to build and is expected to open in late-2017, Mahmood al-Kooheji told Reuters.
"There is a secure channel for the products as they have the customer demand, which will make it very easy to make profits," said Kooheji, adding that the joint venture was the first outside India for Synergies Castings, which supplies alloy wheels to car companies including General Motors, Ford and Toyota.
It will have an annual production capacity of around 25,000 metric tonnes, equivalent to around 2 million wheel alloys, Kooheji said.
The joint venture is split 51/49 percent between Synergies Castings and Mumtalakat, with the latter helping to secure loans from Bahraini banks to finance its construction.
Kooheji said the amount of cash to be raised from banks would be determined later but both partners had pledged enough money to complete the plant without it.
Mumtalakat has been making a number of moves to develop Bahrain's downstream aluminium industry. The fund's head of industries and services said earlier this week that it was close to buying 49 percent of Spanish aluminium products group Aleastur.
The fund owns the kingdom's stake in Aluminium Bahrain, which is currently expanding production capacity of the metal to 1.45 million tonnes per annum.
Kooheji said it was working on a number of deals to boost the downstream sector to absorb that increase in supply.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.