Klesch Group’s Aldel to restart production in 2015

The Dutch smelter named Aluminium Delfzijl (Aldel) owned by the Klesch Group had applied for bankruptcy 10 months ago but they are now planning to start production early next year.

Klesch, the Swiss-based commodities company said that their decision was based on the improving global aluminium market as well as a proposed deal to use the German power grid to run the smelter. The latter will help them secure cheap German electricity to power the smelter, cutting costs.

In a power-intensive production like aluminium, competitive energy powers have the power to make or break the company.

The smelter plans to start modestly with an output of 100,000 tonnes per year to cater to the fast growing automotive industry. The smelter, that has an annual capacity of 170,000 tonnes, aims to appoint 200 people by the end of 2015.

Klesch Group, owned by the American billionaire Gary Klesch, had bought the smelter in 2009 but by January this year they had applied for bankruptcy due to the lack of an economic energy deal.

The last two years had been bad for the aluminium industry in general due to low metal prices and oversupply. Many smelters had cut back production to recover from losses. However, the market is already recovering and supply is expected to go into deficit next year boosting prices.

The benchmark LME has also seen a huge improvement this year making a positive climb of 15% compared to last year’s drop of 13%.