Dubai's Dubal sales drop 30 percent in first quarter, company plans cost cuts

BEIRUT: Aluminum giant Dubai Aluminum Company, or Dubal, said Monday its sales declined by 30 percent in the first quarter of 2009 compared to the same period last year, due to a sharp drop in demand from the automotive, commercial transportation, building and construction sectors. "We have seen a drop of 30 percent in our sales during the first quarter of the year due to global decline in the automotive industry," chief executive, Abdullah Kalban Kalban, told an industry conference in Dubai. "We expect our sales to drop further by 20 percent in the second quarter," Kalban added. Despite slump in sales, Dubal will not cut its production levels in 2009, but will attempt to reduce production costs instead. "By the end of 2009 we expect good growth in the MENA region which will help us improve our bottom-line," Kalban said. Dubal is fully owned by the government of the UAE emirate of Dubai, via the Investment Corporation of Dubai. As it is not traded in one of the UAE securities exchanges, the company is not obligated to publish quarterly results. In April it announced full-year profit of $601 million for 2008, representing a 16.1 percent increase from 2007. Aluminum producers had a bumper year of high revenues in 2007 and through the first half of 2008 until they were hit by the impact of the global crisis that brought demand for metals down on a wide scale. In the fourth quarter of 2008 and the first quarter of 2009, several large aluminum producers in the Americas, South Africa, Europe, and Asia said they were reducing output or delaying expansions. Kalban said Dubal will go ahead with its joint aluminum factory project known as Emal. The project, which will be jointly constructed with Abu Dhabi's state-run Mubadala Development Co., "will not be postponed," Kalban stressed during the conference. Meanwhile, doubts were raised about the future of Dubal's pre-announced aluminum factory project at the King Abdullah Economic City in Saudi Arabia after statements by one of its executives. Walid al-Attar, vice president of marketing and sales at Dubal, said that the aluminum factory project "might be put on hold due to unfavorable market conditions." Dubal's other partners in the project are the Saudi Investment Authority and Saudi mining company Maaden. Dubal is one of the world's largest aluminum smelters with annual capacity of close to 1 million tons. Its customers include companies in the international automotive and aerospace industries which felt the impact of the global recession very strongly. - RPN source：www.dailystar.com.lb