Novelis leaves Abu Dhabi rolling mill project

15 March 2011

Abu Dhabi Basic Industries Corporation declines to name new partner

Abu Dhabi Basic Industries Corporation (Adbic) has dropped Indian-owned Novelis as the partner for the rolling mill project in the Khalifa Industrial Zone (Kizad) in Taweelah.

Adbic has found a new partner that will hold a 50 per cent stake in the project.

“The partnership with Novelis is not existent any longer, we have a new partner on board since the start of the year,” said Juan Gomez-Cordobes, vice president of Adbic’s metals division, at the MEED Aluminium conference on 15 March, declining to name the new partner.

Gomez-Cordobes also revealed that Adbic are deliberating about the size of the rolling mill, and are cautious about bringing extra capacity to the market for fear of causing oversupply.

The sole operating rolling mill in the GCC, a 165,000 tonnes a year (t/y) mill in Bahrain, will soon be joined by the 400,000 t/y mill in Ras al-Zour, Saudi Arabia. A 140,000 t/y rolling mill in Sohar, Oman is also in the pipeline.

“We are working very hard to find a way to fit another rolling mill into the Middle East,” said Gomez-Cordobes. “We have to work together to ensure that we don’t destroy the flatroll market in the region and the region as a supply basis for other regions. That is the worst thing that can happen to the downstream market.”

This position contrasts with statements made by Gomez-Cordobes in May last year, when he told MEED that Adbic was looking to break ground on the project in early 2011 (MEED 23:05:10).

Adbic is building an aluminium extrusion plant with the UAE’s Gulf Extrusions Company, as well as an aluminium rod plant with Bahrain’s Midal Cables at Kizad.

Novelis, meanwhile, suggested that its project pipeline forbids a participation in the Kizad rolling mill. The company in May announced it will spend $300m to expand its rolling mill capacity in Brazil. It is also helping Indian parent company Aditya Birla Group to develop a rolling mill in India.

“We are making sure we’re growing our business in sensible way, and need to do that in a phased way,” said John Gardner, vice-president at Novelis at the conference.

The Middle East is one of the few global markets where Novelis does not have a presence. The company currently produces around 19 per cent of the world’s flat products, operates in 11 countries, employing around 11,600 people worldwide and posted revenues of $8.7bn in its 2010 fiscal year.

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications