Garmco plans $50m investment to bolster capacity

Bahrain-based Gulf Aluminium Rolling Mill Company (Garmco) plans to invest $50 million for capacity expansion, chief executive Graham Bruce told the GDN.

The $450m annual turnover company will be boosting its re-melt and casting facilities in parallel with Alba's potline 6 expansion, he said in an exclusive interview.

"Plans are finalised, feasibility studies have been completed and all necessary permits are in place.

"A new casting facility will add 120,000 metric tonnes of casting capacity and forms an integral part of Garmco's 3-5 years strategic plan."

The mill's current capacity is 165,000 metric tonnes annually. Garmco meets a third of its raw material requirements through the re-melt of scrap materials, which will also be expanded.

"The expansion will create up to 60 jobs for Bahrainis."

Alba is a fundamental part of Garmco's supply chain and supplies the bulk of its raw material needs.

"In fact, we would like to purchase more, which is why we look forward eagerly to the potline 6 expansion and Alba being able to cover more of our needs than at present."

Mr Bruce is confident that the company will be able to leverage its more than "30 years of aluminium rolling experience and an excellent reputation for quality" to remain one of the largest downstream aluminium facilities in the Gulf region for rolling, cutting and fabricating aluminium, even as new mills are set up in the region.

"Fortunately, these new entrants will target different markets and different product ranges. Garmco mainly specialises in producing high quality rolled aluminium products with various sizes and alloys including circles, sheets and coils," he added.

Garmco is certified to ISO 22301, ISO 9001, ISO 14001, ISO 27001, OSHAS 18001 and BCMS 25999 quality management systems and has a string of subsidiaries stretching from Australia to the US.

"Nearly 75 per cent of our sales are outside the GCC and our strongest market is the wider Middle East, followed by the US and Europe," he said.

To support the growing downstream industries in the region, a foil mill of 20,000 metric tonnes capacity was commissioned just south of the main mill in 2000.

"It produces semi-rigid container stock and fin stock to meet the growing demands of the converters in the Middle Eastern market," Mr Bruce said.

Due to declining aluminium prices in the international commodity markets, Garmco has seen its margins remain flat or decline slightly during the past few years.

However, the main factor, which threatens its competitiveness, is the threat posed by Chinese competition entering the market with rock-bottom unrealistic pricing.

"To maintain our profitability and as part of our continuous improvement strategy, we have had to focus strongly on cost reduction exercises, business process improvement and rationalisation of our product portfolio. "At the same time, we are exploring new products and markets," he said.

The company has one of the highest levels of localisation, with Bahrainis making up more than 85pc of the workforce.

"More than 600 families depend on Garmco and our contribution to the economy lies not only in the creation of jobs for Bahraini employees, but also in our use of the multiple local suppliers and services provided within the kingdom," Mr Bruce added. avinash@gdn.com.bh

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