Exclusive Interview

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OBG talks to Duncan Hedditch, CEO, Emirates Aluminium (EMAL)

To what extent has the global economic slowdown affected your expansion plans?

HEDDITCH: When you prepare to put together an investment of this scale you create a business plan with a very long-term view of costs, revenues and markets. And it is important that it makes sense over the long term. So although the markets are not as good as they were last year, it is in many respects irrelevant to us now. Especially taking into account that we are not currently in production – then it is truly irrelevant in terms of revenue. In short, the question should be does your business plan still hold up in the current climate? The answer to this is, ‘yes it does', and the recent downturn has not affected our plans going forward.

Have falling aluminium prices changed your sales strategy?

HEDDITCH: There has been little change in strategy. Next year is a small production year because it's the first year and we do not hit full production rate until the end of next year. However, we have already seen significant interest from customers that we would like to work with. In fact, we have actually done some business already in terms of long-term business with customers that we are very pleased to have on our books.

How excited are you about the potential for carbon capture and storage (CCS) technology being employed in your operations and when will we start to see the benefits?

HEDDITCH: Personally and professionally, I am very excited about it. To put carbon capture on the power plant section is just terrific. It's an absolute first in this industry and I think it is a necessary and very important demonstration of leadership from the government of this country. We are very fortunate here that there is the capacity to do it – to have the oil wells for the reinjection. The most important issue at this stage is that the decision has been made to go and do it. This means it will happen. Carbon capture will not go on here from the first day of operations, but with recent studies we have addressed all the technical issues because initially the plant wasn't designed to support it. Those technical issues have now been addressed. Now it's simply a matter of Masdar, with us, executing the project. The project will eliminate all the carbon from the carbon generator in the power plant, which accounts for about 7/8's of total emissions. We haven't got an execution schedule just yet as we have been doing a feasibility study with Masdar and their consultants. But it is years away not months, though at the same time its not decades.

How will the creation of large-scale industrial projects encourage the development of small and medium-sized enterprises and add depth to Abu Dhabi's economy?

HEDDITCH: In other communities where I've worked in this industry, for every direct hire job in the smelter – depending on the manning strategy of the smelter and the capability of the region – you had between four and eight jobs generated in the community supporting the smelter. For starters, you have the work associated with the logistics and delivery of materials and transportation of products, and so on. Additionally, you have a lot of employment created with minor operating supplies, such as safety equipment. There is also job-creation associated with maintenance and engineering support. We will have our own capability for this, but we will always outsource for the peaks and troughs. There is also a whole lot of infrastructure required for training and development – some of this already exists but we will be leaning on the universities to support our needs. An industry like this is very much a foundation sector for further development. If there are existing small businesses, they will surely grow and if there are new small businesses that were set up to service us then they will expand and seek other customers, thus expanding further. So, by the creation of this industry, you start to add a lot of layers and depth to the economy.

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