DOHA: The Middle East’s aluminium industry is in an advantageous position, and can play a key role in industry consolidation and the development of new globally active players, shows a new report by The Boston Consulting Group (BCG). The Middle East’s strategic position is supported by the recent $15 billion merger of Dubai Aluminium (Dubal) and Emirates Aluminium (Emal) to create Emirates Global Aluminium, the world’s fifth-largest aluminium producer.
The GCC aluminium market’s cost advantage is supported by its proximity to Europe, Asia and Africa and growing aluminium demand from the construction, packaging, transportation and industrial sectors. We are seeing local players make strategic movements both upstream and downstream as they build viable value chains and further aluminium-driven manufacturing, the report noted.
“To become profitable and generate attractive returns for their shareholders in this environment, aluminium companies must adopt a more aggressive approach to confronting the industry’s challenges,” said Knut Olav Rød, BCG partner. “We believe this more aggressive approach must be implemented on the industry level as well as the company level.”
Looking forward, BCG asserts that the Middle East’s aluminium industry will need to explore some key issues, including how much additional smelting capacity will be beneficial to the region and the global market, the new developments on downstream and new products, the role GCC companies can play in mitigating Chinese supply effects, GCC as destination for Chinese smelter investments, how GCC aluminium companies can further improve cost position and whether a truly global aluminium company will be headquartered in the GCC. The Peninsula
