13/05/2009
Global aluminum production is down almost 15% due to a worldwide reduction in demand because of the slow economy. As a result, many international companies that hoped to expand in the region have had to put a hold on new projects.
Dubai Aluminum Company (DUBAL) is one of the companies that recently announced that it does not intend to expand operations in the Gulf after its sales went down 30% this year due to the worldwide reduction in auto manufacturing.
Waleed Al-Attar, Vice-President of Sales and Marketing for DUBAL Company in the UAE, said that the company's plans to set up a factory in the Kingdom are uncertain due to current economic conditions.
British mining company Rio Tinto, the largest mining company in the world, delayed plans to build an aluminum smelting plant in the Easten Province worth 8 billion dollars in a joint project with Saudi mining company Ma'aden. The project had been set to begin operations in 2012.
Now that Rio Tinto has pulled out of the project, Ma'aden company is looking for another way to finance the project by the 3rd quarter of this year. Financing woes will delay the start of production at the smelting facility to be built along the eastern shore of the Kingdom untill 2015.
Abdullah Al-Kalban, the Chief of Production for DUBAL, said during a recent aluminum manufacturing conference in Dubai that his company will not reduce production from 950,000 tons because of the reduction in sales.
DUBAL hopes to build the new smelting plant inside the King Abdullah Economic City and representatives of the company met last month with representatives from SAGIA and Ma'aden seeking ways to to construct the facility.
The Kingdom contineus to be the country least affected by the global economic crises due to precautions taken over the last five years. Overal spending in the Kingdom has increased 36% this year reaching 225 billion riyals. But despite this, the private sector faces challenges with financing. Huge long term projects in Saudi are now facing financing difficulties due to the freeze in lending that enable 20 year financing.
