According to TradeArabia News sources, the UAE aluminum extrusion market is estimated to be in excess of 175,000 metric tonnes (MT), about 35 per cent of the total GCC (Gulf Corporation Council) demand and it is growing at a CAGR of 8 to 9 per cent for the time period from 2011-17.
Emirates Extrusion Factory (EEF), a leading aluminium extrusion company in the UAE, has recently announced the acquisition of a state-of-the-art production facility for aluminium extruded profiles from AKFA Aluminium and Plastic FZE in Dubai, to increase its operational efficiency and meet rising demand.
Dubai Aluminium (DUBAL) and Emirates Aluminium (EMAL) also presented a promising picture by actively participating in the annual Aluminium China 2012 exhibition in Shanghai from 6 to 8 June. The combined DUBAL-EMAL exhibition stand highlighted their product portfolio with an aim to expand their business in Asia. The presence of DUBAL and EMAL at Aluminium China is relevant from the point of view of ongoing negotiations between the Gulf Co-operation Council (GCC) region and China for a Free Trade Agreement (FTA).
According to Frost & Sullivan, a leading business research & consulting firm, the Emirates Extrusion has the potentiality to become one of the top players in the GCC. They believe, EEF has made a wise decision by acquiring an existing facility, as it reduced the risk of Greenfield expansion. Frost & Sullivan considers it a fair deal considering the proximity of raw materials from nearest smelters, sea port access, low production cost, additional space for capacity expansion and a large customer base for aluminum extruded profiles in the UAE.
While the media and the research sector are highlighting the growth and expansion of UAE extrusion industry, there are a few who voice their opinion against such expectations: “The Aluminum Market in UAE is completely collapse since end 2008. Since that time there was not a proper investment on that direction from any one of the major possible investor.” opines an extrusion industry professional. “Imagine that there is only one Extrusion in Doha……and they are scared to starting up because there is no market to give the reason to have a proper opening.” He says.
For him a booming extrusion industry in UAE is just a “fairy tale” and there is “ZERO demand of industrial size profiles”. He also expresses concern about the “5 extrusion companies that are closed in 2011”. The reference to Emirates Extrusion’s acquisition of a state-of-the-art production facility for aluminium extruded profiles in Dubai is also critical because in his views the “extrusion company recently sold…. was never even really open”.
According to his opinion, without having a proper income from GCC Local Market and depending on export to African countries will actually make the extrusion industry face harder time in future.
“The trick to understand the market is the demand of dies (not the Chinese or the Turkish) for the extrusion press …. No Dies means no order.” What he emphasizes is that there is no money for investment, financial organizations and banks are not willing to put money on this sector. “no moneys means no investment, no clients, and no work “. So, UAE companies are losing out to western and Chinese competitors.
In November 2012, Qatalum will be organizing and hosting the 16th International Arab Aluminium Conference and Exhibition (ARABAL) in Qatar. It is the conference of choice for anyone interested in the Middle East aluminium industry. While the Middle East aluminium industry looks promising from one end, from the other end it looks demoralizing. There are definitely hopes in the field if the Extrusion Industry can focus more on the non-architectural sectors as the architectural sector was affected by the real estate slump and recession, which in return hampered the growth of the extrusion companies. Under such condition, it is for us to wait and see whether the expected boom about the aluminum extrusion industry in UAE is a myth or reality.
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