Biggest Middle East Aluminum Maker Targets More Acquisitions - Bloomberg

Biggest Middle East Aluminum Maker Targets More Acquisitions - Bloomberg

The biggest aluminum producer in the Middle East wants more acquisitions to boost growth after making its first two deals this year, its chief executive officer said.

Emirates Global Aluminium is looking to buy more metal-recycling assets as the company sees growing demand for products with a lower environmental impact, CEO Abdulnasser Bin Kalban said in an interview. EGA, which operates its main plants in Abu Dhabi and Dubai, wants to expand in Asia, where it hasn’t yet done any deals, he added.

The company, formed by merging government-owned metals producers in the UAE’s two largest emirates, made its first acquisitions as a combined entity this year. It completed the purchase of Germany’s Leichtmetall Aluminium Giesserei Hannover GmbH in May and a week ago announced plans to buy 80% of recycling firm Spectro Alloys Corp. in Minnesota in the US.

“We’re looking forward to more acquisitions,” Kalban said. “We’ll look closely at Far East Asia because also this is a big market of EGA.” The company is also searching for opportunities in Europe, the US and Mexico. EGA didn’t disclose financial terms for either of the deals and didn’t comment on how much it might budget for upcoming transactions.

Oil-rich Middle Eastern countries have been developing industries like manufacturing, chemicals and technology and those companies are now expanding abroad to diversify earnings from energy exports. The UAE has pledged to have net zero emissions by 2050, even as it boosts oil and gas production capacity.

EGA is looking to produce more metal by recycling older products, which Kalban said makes use of ample supplies and cuts emissions. Demand for such metal is growing in the US and Europe, and a diversified customer base and sales to different market segments will help EGA weather a slowdown in the construction industry in China, he added.

The company, whose owners have been evaluating selling shares in the business, reported first-half profit of 1.84 billion dirhams ($500 million), down from 1.96 billion dirhams in the year earlier period after aluminum prices declined and the UAE introduced corporate tax. Sales volumes totalled 1.3 million tons in the first half, in line with the period last year.