“Aluminium industry has already established itself to be a major growth driver for the Gulf Economy.” Mahmood Daylami, Secretary General, Gulf Aluminium Council

Gulf Aluminium Council (GAC) is a coordinating body that represents promotes and protects the interests of the aluminium industry within the Gulf. In a conversation with AlCircle, Mahmood Daylami, Secretary General, Gulf Aluminium Council throws light on the objectives and functions of GAC, shares his outlook for the Gulf Aluminium Industry and offers an insight into the current aluminium market.

With thirty three years of experience in the Aluminium industry and as the Secretary General of GAC, Mr. Daylami has been playing an important role in improving the international competitiveness of the Gulf Aluminium Industry. Prior to joining Gulf Aluminium Council, he held the position of Deputy Chief Executive Officer at Aluminium Bahrain (ALBA).

Excerpts from the interview:

AlCircle: What are the main objectives and the functions of Gulf Aluminium Council?

Mr. Daylami: During the last five years, the number of smelters in the Gulf aluminium industry has increased from two to six and annual production capacity has increased from 1.6 million tons to 5 million tons by end of 2014 making Gulf region a key player in the aluminum business worldwide. As a result the six major smelters of the region decided to form a coordinating body to deal with common issues and strategies and to represent the aluminum industry in the Gulf. The activities of GAC are mainly facilitating and coordinating and sharing best practices and utilizing the synergy that exists among the smelters in the Gulf. GAC is involved through various committees in productivity improvement, HR issues, Health, safety and environment as well as community plus issues of international concerns.

AlCircle: Could you tell us in brief about the new aluminium projects and expansions that are coming up in Gulf regions?

Mr. Daylami: There are a number of projects that are currently being implemented in Gulf. Ma’aden, which is a fully integrated aluminum company from bauxite mining to rolling mills, has completed its smelter and they are in the startup phase. After initial setbacks in one of the two pot lines, the smelter has resumed its rump up. They are also half way through the construction of a 1.8 million ton alumina refinery. EMAL Phase II is ahead of schedule and should be completed this summer and once the startup is completed it will produce 1.3 million tons of aluminium a year. Oman Rolling mill was also completed two months ago and is already marketing its products around the world. Two more extrusion plants are on the line, one in Qatar and the other in Abu Dhabi.

AlCircle: In your view, what is the future prospect for the aluminium industry in Gulf?

Mr. Daylami: Investment in aluminum industry in the Gulf is around US$40 billion, 12 000 people are working directly in these smelters and 30,000 through small and medium size companies associated with the industry. The industry provides advanced technical and managerial training to nationals and contributes significantly to the local economy. It’s already a major driver of the economy in the region with 70% of the product exported to different countries around the world.

AlCircle: What is your take on the present recessionary condition in the aluminium market?

Mr. Daylami: Like any commodity there are market fluctuations in the aluminium industry, and it looks like that the low LME price has taken much longer to recover than it was expected due to buildup of metal in warehouse. As long as the bank interest rate remains low the quantity stored is likely to grow even more and metal would be locked in financial deals by a number of financial institutions. It is very difficult to predict the price but demand is likely to increase in the automotive sector due to the advantage of aluminum over steel in reducing weight and carbon emission. Transportation would be key area of growth for the aluminium industry in helping western countries meeting their environmental targets.

AlCircle: Which industrial sector (automotive, construction, transport, packaging electrical etc.) do you think has the potential to boost the demand for aluminium?

Mr. Daylami: As I said automotive industry will be one of the main growth sectors in the West but in the Gulf Regions, for construction industry, a number of new housing and projects in the region has picked up specially in UAE, Saudi and Qatar.

AlCircle: Which geographic regions or countries do you think would contribute the most in supplying to the growing aluminium demand in near future?

Mr. Daylami: Aluminum production will grow where there is energy and consumption will grow where there is market. China is both producing and consuming 50% of total word aluminum as they are modernizing their production facilities and developing consumer based products. Other area of aluminum growth will definitely be Canada and the Gulf.

AlCircle: As E-Commerce has caught on in a big way in the consumer sector; do you think e-commerce model can work well in the aluminium sector?

Mr. Daylami: For any consumer product that needs mass marketing, an online portal will be the right way. However, for specific industrial products that are limited to smelters such aluminum which is customer demand driven, it is a different situation at least for now and foreseeable future. Nevertheless smelter can take advantage and they are doing the same in promoting their sustainability and community work.

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