Interview: Tim Murray
How long do you think it will take the aluminium industry to recover from the drop in prices?
TIM MURRAY: The world will continue to experience the aftershocks of lower commodities prices as long as the dollar is appreciating in value. In the first half of 2016 we witnessed the collapse of “all-in” aluminium – the London Metal Exchange price plus regional premiums – exerting further pressure on marginal producers to cut output around the world. Aluminium prices are likely to remain low as long as the market fails to correct for imbalances.
If China restarts smelters with increased capacities in 2017, combined with its domestic slowdown, it will produce a surplus of aluminium, leading to another supply glut. Smelters around the world have been badly hit by inexpensive Chinese imports and forced to close after struggling to reduce costs.
Falling crude oil prices have prompted many governments to both review their expenditure and initiate new economic plans, negatively impacting commodities, particularly aluminium as it involves the highest energy intensity during production among the major metals. Although, we remain optimistic in the demand for aluminium in the long term. Global demand is projected to grow by 5% in 2017 fuelled by automotive production and construction.
What innovations have you found when implementing safety guidelines for employees?
MURRAY: Alba traditionally had good systems and processes in place but there was no proper sense of responsibility. This is where we had to make changes and everyone, from the top down, had to take personal responsibility for safety because in an industry such as ours, safety should always come first. Apart from the approximately 2800 people working inside Alba, we have close to 600 contractors and it is a challenge to bring everyone into the fold. Different languages, multicultural values and educational levels are important factors to consider. One of the greatest challenges in creating effective safety initiatives is to convince workers to actively participate. The key to success is behaviour, which we managed to achieve through means of direct communication. Safety expert visits and talks, inter-departmental visits, campaigns, and colourful posters and messages in multiple languages were all part of communicating our safety goal.
How achievable is the goal that half of the new supply generated by Line 6 will be sold to local downstream manufacturers?
MURRAY: After many years of preparation, we view the Line 6 expansion mega-project as an opportunity to leverage our expertise, and grow the company and the kingdom’s economic footprint. If we focus on keeping the value chain strong, the shift from the primary sector to downstream would be a natural progression. Alba currently sells approximately 50% of its production to the local downstream market. Once Line 6 is operating at a constant basis, we plan to further increase this level, which in turn will create many new employment opportunities for Bahrainis both at Alba and in the local downstream market; as we grow so does the downstream sector.
What are the hurdles to increasing recycling?
MURRAY: The aluminium recycling market is at a nascent stage in the GCC, as it is predominantly an export-driven market. Compared to global standards, the Middle East has a nominal rate of 20% aluminium recycling, which includes smelter re-melting, scrap generation and secondary re-melting. Our region has a strong aluminium industry which could benefit from aluminium recycling initiatives, and as the Middle East is becoming one of the fastest-growing aluminium markets in the world, re-melting business is something to be looked at seriously.
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