Key Points:
- Emirates Global Aluminium is seeking more acquisitions, particularly in metal recycling, targeting growth in Asia, Europe, the US, and Mexico.
- The company acquired Germany’s Leichtmetall and plans to buy 80% of Minnesota-based Spectro Alloys. EGA aims to increase recycled aluminum production.
- EGA reported a slight drop in first-half profit to 1.84 billion dirhams due to lower aluminum prices and new UAE corporate taxes.
- Expanding into recycling and diversifying customer bases are key strategies to mitigate risks like the slowdown in Chinese construction.
Emirates Global Aluminium (EGA), the largest aluminum producer in the Middle East, is seeking more acquisitions to fuel its growth, particularly in the metal-recycling sector, according to CEO Abdulnasser Bin Kalban. The company aims to capitalize on increasing demand for products with lower environmental impact and expand its footprint in Asia, where it has yet to make any deals.
EGA, formed from the merger of state-owned metals producers in Abu Dhabi and Dubai, completed its first acquisitions this year as a combined entity. In May, Emirates Global Aluminium acquired Germany’s Leichtmetall Aluminium Giesserei Hannover GmbH, followed by a recent agreement to purchase an 80% stake in Spectro Alloys Corp., a recycling firm based in Minnesota, USA.
“We’re looking forward to more acquisitions,” Kalban said, emphasizing the company’s interest in Far East Asia, which he described as a significant market for Emirates Global Aluminium. The company also explores opportunities in Europe, the US, and Mexico. Financial terms of the recent deals were not disclosed, and EGA did not comment on its budget for future transactions.
Oil-rich Middle Eastern nations, including the UAE, are diversifying their economies by developing industries such as manufacturing, chemicals, and technology. Despite increasing oil and gas production capacities, EGA’s strategy aligns with the UAE’s broader goals, including a commitment to achieve net zero emissions by 2050.
EGA focuses on producing more aluminum through recycling, leveraging ample supplies, and reducing emissions. Kalban noted that demand for recycled aluminum is growing in the US and Europe and that diversifying its customer base and market segments will help EGA navigate challenges such as the slowdown in China’s construction industry.
Emirates Global Aluminium, whose owners are considering an initial public offering, reported a first-half profit of 1.84 billion dirhams ($500 million), down from 1.96 billion dirhams in the previous year. This was primarily due to lower aluminum prices and the introduction of corporate tax in the UAE. Sales volumes remained steady at 1.3 million tons in the year’s first half.
