Adbic announces Dh367m agreement with Midal

The economy's relentless diversification into heavy industries took another step forward yesterday when Abu Dhabi Basic Industries (Adbic) announced an agreement with a Bahraini firm to build an aluminium rod plant at Taweelah. The agreement with Midal Cables paves the way for construction of a Dh367 million (US$100m) plant, which will produce 150,000 tonnes of aluminium rod a year and also take advantage of feedstock to be produced next door when a huge new smelter from Emirates Aluminium (Emal) is completed.

Aluminium rods are mainly used in high-voltage power lines and wiring. Adbic said that the plant would be ready to begin production by 2010. The rod plant was in keeping with Adbic's - and the country's - push to develop heavy industries that add value to locally produced raw materials, said Jamal al Dhaheri, the senior vice-president of metals at Adbic. "It fits Adbic's drive to contribute to Abu Dhabi's industrial diversification through attracting metal conversion industries and leveraging Emal's planned aluminium upstream capacity in Taweelah," Mr Dhaheri said in a statement.

Plans for the Taweelah site include a deepwater port, a petrochemicals complex and the Emal smelter, all of which will sit next to the emirate's main power plants. Adbic would be a major client for the aluminium from Emal's new smelter, which will produce 700,000 tonnes per year when it is completed in 2010. A planned expansion to 1.4 million tonnes, after the first stage is completed, would make it the largest smelter in the world.

Yesterday's announcement follows Adbic's launch last month of Polymers Park, a plastics conversion facility in Mussafah that could attract Dh15 billion of investment from plastics conversion firms around the world, and produce 33 million tonnes of polymer products annually. Like the aluminium rod plant, the polymer facility would take advantage of an existing glut of locally produced feedstock. In this case, that would involve raw plastic pellets produced in Abu Dhabi, Saudi Arabia and other GCC countries. It would turn those pellets into bottles, bags and other products sold all around the globe.

Last autumn, Adbic announced that it had put together a financing plan for its own aluminium smelter to be built in partnership with Rio Tinto. That project, however, appears to have stalled at the feasibility stage, and no further information has been released. Adbic's subsidiary, Emirates Steel, is also building a steel plant that is scheduled to be up and running by 2010. cstanton@thenational.ae