“The tariffs on aluminium, in fact, had little impact on our business in 2018” ~ Hugues Vincent, CEO of the Aluminium Division of Fives

Fives is a business conglomerate from France having diversified business interest. The company specialises in designing and supplying machines, process equipment, and production lines for the world’s largest industrial groups including the aluminium, steel, glass, automotive, aerospace, logistics, cement, and energy sectors.

Here, we have shared an excerpt from the interview with the CEO of the aluminium division of the company Mr. Hugues Vincent, who has told us about the business activities of Fives Group and its current projects catering to the aluminium sector, as well as his exclusive outlook for the global aluminium industry in 2019.

To know all of that, continue reading the interview:

Q: Please brief us on Fives Group’s aluminium business and its area of operations worldwide.

A: Fives is a global supplier of processes, technologies, engineering, equipment, complete plants and services to the reduction and carbon sectors of the aluminium industry worldwide. We have been pure players in that industry for more than 50 years, under the brand names of Solios and ECL.

Our business employs more than 800 people. Our offices for processes, technologies, engineering and our workshop for equipment manufacturing are located in France. Our services subsidiaries are located in Europe, Canada, South Africa, the Middle East (Bahrain, Dubai, Saudi Arabia), Australia, India, Russia and China, in proximity with our installed base.

Q: Could you please brief us about the performance of the aluminium division in Fives last year and what is your projection for 2019?

A: In 2018, we were fully engaged in the construction of Alba 6 in Bahrain with 3 major contracts, for the Gas Treatment Centres, for the Pot Tending Machines and for the Green Anode Plant.  

We also supplied equipment to Trimet in France, Hydro in Norway, and Xinfa in China.

In 2019, the Alba 6 systems will be started up and completed, and we are mobilizing for a 5 year maintenance contract for the PTMs.

No new major investment project will be launched in 2019 but our services activity is quite strong because, with a low LME our customers need our support to optimize their cost performance.

Q: Which region will be your focus area for the aluminium business in 2019?

A: Our focus in 2019 is Europe, Russia and the Gulf.

In Europe, several anode baking furnaces must upgrade their fume treatment centers( FTC) to comply with the BREFs( 2020). So far, we have been successful in booking the FTC contract for Aluminium of Greece, but other compliance projects are coming up.

In Russia, after the lifting of the US sanctions, Rusal is now resuming its projects at Taishet where we already had several equipment supply contracts and in Sayansk for the refit of the anode baking furnaces.

In the Gulf, we are commissioning our systems to support the production ramp-up of Alba 6. Although there is no major new capacity project being launched, our service subsidiaries are busy implementing modifications and upgrades of equipment to optimize our customers’ performance.

Q: Have the tariffs on aluminium impacted your business in 2018 and how are they going to turn the cards in 2019 as the tariffs are now lifted from the US and Canada?

A: The tariffs on aluminium, in fact, had little impact on our business in 2018. We thought that several smelters in the USA would need our services for their restart but in fact, despite the US political push, their restart has been limited because of their high Opex, in particular the cost of alumina in 2018.

In 2019, with the US tariffs being lifted for the aluminium imported from Canada, we think that RTA will finally launched its long awaited extension of Jonquière AP 60.

Q: You have been working close with the Gulf aluminium producers. What is your business outlook for the Gulf aluminium sector in 2019?

A: With the LME on the low side and alumina cost on the high side, the Gulf aluminium producers are also faced with reduced margins. Subsequently, no major new capacity project is anticipated in the near future; however most producers are doing their best to increase the utilization rate of their industrial assets through improved reliability and availability, amperage creep or pot addition.  For that purpose, we provide a wide portfolio of services to our Gulf customers, in particular:

-in 2019, we will start the operation of a new workshop in Bahrain to repair tools, manufacture and stock spare parts for shorter lead times.

-we provide training programs to the Gulf smelter operators; our Back-to-School program, which was held successfully in Oman in 2018, will move to Saudi Arabia in 2019.

-in Bahrain, we are cooperating with Tamkeen, the Bahrain Education Authority, and Bahrain Polytechnic, to host junior Bahraini engineers as interns within Fives for international engineering exposure, and enhanced employment in Bahrain afterwards.

Q: What is your outlook for the global aluminium industry in 2019?

A: Although the primary aluminium demand remains strong globally, there has been such production overcapacity built in China and so much stocks piled up worldwide that we do not expect the LME to raise above 2000 $/t again for a long time. Most of our customers are striving to reduce their operation costs to generate some cash.  Therefore, it is unlikely that major capacity projects will be launched in the near future. 

In such economic environment, only resilient engineering & services groups like Fives, because of its diversified portfolio of business activities in various industries that allow Fives to “surf” through industry cycles, will survive and remain focused on the primary aluminium industry.

This is why customers are turning to us to continue innovating, in particular in digital solutions that provide short-term benefits. Beyond the basic concepts which everybody talks about, Fives is already addressing the market with some concrete applications such as:

-smart cranes: the cranes are connected to provide on-line operation & maintenance data and diagnostics to operators and their management.

-customer portals: customers can monitor their operation & maintenance KPI on-line, send enquiries to the OEM through a web ticketing service and have access to their equipment technical documentation.

-anode tracking and troubleshooting: our Amelios suite is a carbon digital chain which identifies each anode and correlates the anode performance in the pot to its production parameters, allowing quicker troubleshooting and lower net carbon consumption.

2019 will therefore be a transition year with lower project activity, sustained service business and great opportunities to innovate and demonstrate new solutions with our customers.