The Bahrain manufacturer will be in a better position to serve growing regional and international markets with the decision to expand its production capability
Bahrain’s Gulf Aluminium Rolling Mill Company (Garmco), which has nearly 75 per cent of its sales turnover coming from markets outside the GCC region, is embarking on an expansion following the decision by its raw materials supplier Aluminium Bahrain (Alba) to commence work on its Line 6.
Garmco will be investing $50 million to boost its re-melt and casting facilities with plans finalised, feasibility studies completed and all necessary permits in place, Graham Bruce told Gulf Daily News, sister publication of Gulf Industry.
“A new casting facility will add 120,000 tonnes of casting capacity and forms an integral part of Garmco’s three- to five-year strategic plan,” he said. The expansion will create 60 new jobs for Bahrainis. The mill’s current capacity is 165,000 tonnes annually and Garmco meets a third of its raw material requirements through the re-melt of scrap materials which will also be expanded.
Alba, a fundamental part of Garmco’s supply chain, provides 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,” said Bruce.
The company, whose annual turnover is around $450 million, is leveraging its more than 30 years of aluminiunm rolling experience and excellent reputation for quality to remain one of the largest downstream aluminium facilities in the Gulf region for rolling, cutting and fabrication of 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,” Bruce said. Garmco products are used in a wide range of applications from food containers and stylish up-market hollowware to high-profile architecture and the paint industry.
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.
While nearly 75 per cent of sales are outside the GCC, its strongest market is the wider Middle East followed by the US and Europe, Bruce said. To support the growing downstream industries in the region, a foil mill of 20,000 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,” Bruce said.
While Garmco has seen its margins remain flat or decline slightly during the past few years due to declining aluminium prices, Bruce considers the entry of Chinese products at unrealistic rock-bottom prices a real threat. “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.
More than 85 per cent of Garmco’s workforce is made up of Bahraini citizens. “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,” said Bruce.
In 1981, Garmco was established as a joint venture between the governments of Bahrain, Saudi Arabia, Oman, Qatar, Kuwait and Iraq.
Kaiser Engineering, USA, constructed the plant; machinery was installed by Kobe Steel who also undertook the start-up operation and training of local staff at one of their aluminium plants in Japan.