Indian firm eyes $817 mln Dubai aluminium processor

DUBAI - Mumbai-based Darvesh Group said on Tuesday it plans to invest $817 million to build an aluminium processor in Dubai with a capacity of 135,000 tonnes a year.

"We saw there were many new smelters being built and that 10 percent of the world's aluminium will be produced in the Middle East region and there should be someone who will be able to process it," the group's director, Ahsan Hassan Darvesh said.

He said the planned processor, called Noval, would be the world's biggest of its kind when completed in 2010, and that the company was seeking agreement with Dubai Aluminium and Aluminium Bahrain to become the project's main suppliers.

"We will start production by the end of 2008 with 30,000 tonnes, then 45,000 in 2009 and by the end of 2010 we should be able to produce 135,000 tonnes per year," he told reporters.

Darvesh said the group would finance 20 percent of the project's cost of 3 billion dirhams ($817 million) from its own resources and seek syndicated bank loans for the remainder.

Government-owned Dubal is planning a $6 billion smelter complex to start operation in 2010. It will eventually have an annual capacity of 1.2 million tonnes, making it the largest of its kind in the world.

Dubal's only competitor in the Gulf Arab region, Alba, which operates the world's third-largest smelter of the metal, said it boosted production by 5.1 percent last year to 872,400 tonnes.

Aluminium, used in drink cans, construction, cars and packaging, is the largest industry in the United Arab Emirates after oil. A construction boom in the world's biggest oil exporting region, where more than $1 trillion worth of infrastructure projects are in the pipeline, is boosting demand.

Noval will produce sheets for aluminium composite panels used in construction, pharmaceutical packaging material, home foils, semi-rigid containers for food packaging and lamination foils.

Darvesh Group said Noval has an agreement with a German-based group to sell 40 percent of the plant's output. The company will also target the Middle East, including Iran.