Qamco Chairman Abdulrahman Ahmad Al Shaibi (centre), with other officials, addressing the company’s annual general assembly meeting at the Sheraton Doha Hotel yesterday.
Doha: Qatar Aluminium Manufacturing Company (Qamco), which reported a net profit of QR80m for the financial period ended December 31, 2019, has rolled out a series of cost management measures that will ensure that the company, via its joint venture, the Qatar Aluminium Limited (Qatalum), will remain one of the world’s lowest-cost aluminium smelters.
Qamco, a QSE listed company, is a 50 percent joint venture partner in Qatalum. In its 2019 Annual Report which was presented during the company’s Annual General Assembly at the Sheraton Doha Hotel yesterday, Qamco said that in order to ensure that its joint venture remains one of the lowest cash-cost smelters in the world, the company’s main target is to further increase operating amperage and thus the efficiency of the production facilities. It added that the continued implementation of the ‘Qatalum Improvement Programme’ in 2019 resulted in cost savings in line with defined annual targets.
However, the company also said that geopolitical events negatively impacted the aluminium market and its established supply chains.
Speaking during the event, Qamco Chairman Abdulrahman Ahmad Al Shaibi said that Qamco, which has seen a decline in net profits by 77 percent, was directly impacted by external factors including adverse macroeconomic conditions. “Global economic uncertainty throughout the year, with muted GDP growth, affected the aluminium industry. Most of the demand for aluminium was channeled, via excess inventory levels built up over the previous years, which was sold at lower market rates.
This was reinforced by ongoing trade conflicts, which caused a broad-based slowdown in global economies. Excess production capacity, as well as higher inventory levels, noted in many international markets, also played an important role in increasing pressure on commodity prices. All of these led, in turn, to an imbalance in the dynamics of supply and demand for aluminium products, ultimately affecting margins and profitability,”Al Shaibi added.
According to the annual report, Qamco’s joint venture partnership with Hydro Aluminium Qatalum Holding, provides the company with access to global markets, which helped mitigate the impact of macroeconomic challenges it experienced last year.
Asia (52 percent) remained the company’s largest market in 2019, while its presence in North America (28 percent) remained substantial. Other markets included Europe (18 percent) and Qatar (2 percent).
Qamco’s joint venture is currently evaluating a wide spectrum of potential capital expenditure (CAPEX) primarily associated with risk minimisation and ongoing sustainable operations. Planned projects include pot relining, turbine inspections, a baking flue wall replacement, a swing rectiformer, a plan to enhance cybersecurity protocols and compliance with requirements set by the Ministry of Municipality and Environment in relation to chemical warehouse.
The company’s strategy is also designed to continuously enhance its existing HSE standards, while it works at its joint venture levels to retain Qamco’s leading HSE position in the region.
Waste management in relation to its joint venture facilities remains a challenge, and will be the company’s focus of attention, as larger volumes of spent pot lining which are created from higher levels of relining activity are planned over the next three years.
