Strong potential seen in value-added tertiary aluminium industries

The growth of a downstream aluminium cluster at Sohar augurs well for investment in value-added tertiary aluminium industries, according to top executives at two companies currently at the heart of a promising push to extend the downstream aluminium value chain.

Oman Aluminium Rolling Mills (OARM), which is currently developing a $400 million aluminium rolling mill at Sohar Industrial Estate, and Oman Aluminium Processing Industries (OAPIL), a fully operational downstream plant launched a year ago, have the potential to catalyse the growth of a value-added tertiary aluminium cluster.

At an investment forum held last week,the Chief Executive Officers of both companies outlined prospects for investment in manufacturing facilities further downstream to their businesses. Lloyd A ‘Buddy’ Stemple of OARM, and Frederic Andre Paul, representing OAPIL, also underlined their companies’ respective commitments to support the establishment of a value-added tertiary cluster in the Sultanate. OARM, which is a 100 per cent subsidiary of majority government-owned Takamul Investment Company, is building a 140,000-160,000 tonnes per annum (tpa) capacity rolling mill adjoining the world-scale smelter of Sohar Aluminium.Molten metal from the smelter will be cast into aluminium sheet for the packaging and food preservation foil markets,while finstock will be produced for the automotive heat exchanger and air conditioning sectors.

According to Stemple, OARM’s aluminium coils can serve as basic raw material in the production of an array of value-add products, such as food containers and foil wrap, as well as packaging material for pharmaceuticals, antiseptics, and a wide range of related products.Furthermore, the plant’s location next to the smelter and within proximity of Sohar industrial port makes it uniquely positioned to serve the regional and international markets for aluminium sheet, he said.

“(OARM) is one of the best examples of value added downstream opportunities where the upstream partner supplies 100 per cent of the requirement of the downstream. Very few rolling mills are supplied pure molten aluminium by smelter,and we maxed it up with technology and aluminium strip casting.So we can literally take the benefits of having molten pure aluminium supply into some very unique processing capabilities that allow us to focus on industrial and residential finstock and the foil markets. Also being close to Sohar Port, we can export to most places around the world — from Turkey to West Europe, China, India, Singapore, Thailand, and so on, through Sohar.”

Development and construction of the plant is being “fast-tracked”, with first coils targeted for production in August 2013, he added.Significantly, Oman Aluminium Processing Industries (OAPIL) is also exploring the potential for developing tertiary units downstream to its plant at Sohar. A joint venture of Takamul (49 per cent) and Oman Cables Industries (OCI), OAPIL came into operation just over a year ago, and produces aluminium rod and conductor using hot metal as feedstock from Sohar Aluminium. According to Paul, conductor is primarily supplied to the GCC, while aluminium rod is marketed further afield. The latter is currently sold within the GCC, Maghreb states, Egypt and Europe, although the company is keenly exploring exports to Hong Kong, US and South Africa.

Plant production, which is targeted to reach 45,000 tpa this year, will be ramped up to 50,000 tpa in 2012, well beyond the unit’s design capacity of 48,000 tpa. The CEO also commended the vision of the project’s shareholders in securing enough land to allow for a three-fold increase in output if needed in the future. Commenting on the potential for tertiary investment, Paul stated: “That is under study. We see opportunities.The idea of an expansion is possible. We want to build on our success by making a good product”.