Balancing40 years of experience   and ready to take on             the future               Annual Report                 ...
His Royal Highness       His Majesty King           His Royal Highness                                   Prince Khalifa   ...
Contents                                       Board of Directors   4                                 Executive Management...
Board of       Executive                         Directors     Management                              M.                 ...
| Letter to our                                               Letter to our                                               ...
| CEO’s                                                                                                                   ...
| CEO’s                                                                         Message                                   ...
June                                                                                                                      ...
750                                                                                                                       ...
| Corporate                                                                                                               ...
| Corporate                                                                                                               ...
| Corporate                                                                                                               ...
| Corporate                                                                                                               ...
| Products                                                                                                                ...
| Productsand Markets                                       Our downstream markets are producing                          ...
| Health,                                                                                                                 ...
| Health,                                                                                                                 ...
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
Alba Annual Report 2011
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Alba Annual Report 2011

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Aluminium Bahrain (Alba) Annual Report for 2010, for more information please visit our official website http://www.albasmelter.com

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Alba Annual Report 2011

  1. 1. Balancing40 years of experience and ready to take on the future Annual Report 2011 Aluminium for the world
  2. 2. His Royal Highness His Majesty King His Royal Highness Prince Khalifa Hamad bin Isa Prince Salman bin Salman Al Khalifa Al Khalifa bin Hamad Al Khalifa The Prime Minister of the The King of the The Crown Prince & Deputy Kingdom of Bahrain Kingdom of Bahrain Supreme CommanderAnnual Report 2011 | 2
  3. 3. Contents Board of Directors 4 Executive Management 5 Letter to our Shareholders 6-7 CEO’s Message 8-11 Alba’s Operational Highlights 12-13 Alba’s Financial Highlights 14-15 Corporate Governance 16-23 Products & Markets 24-27 Health, Safety and Environment 28-33 Corporate Social Responsibility 34-39 Financial Statements 40-74Annual Report 2011 | 2
  4. 4. Board of Executive Directors Management M. & Acting Chief Operations Officer YAnnual Report 2011 | 4 5 | Annual Report 2011
  5. 5. | Letter to our Letter to our 1200 Shareholders 1,053 Shareholders 1000 878 800 600 400 Alba continues to work for the 200 Alba remains best interest of its 0 committed to future shareholders by growth through committing to invest pro-active in organic growth Total Debt initiatives (US$ million) • -16.7% Y-o-Y Growth Dear Shareholders, 2011 was a breakthrough year, one in which further strengthen its reputation for integrity and a commitment to operational efficiency and Alba succeeded in meeting all of its targets, with and to confirm the company as a champion for global competitiveness. an EBITDA and Free Cash Flow at US$ 582 ethical values. million and US$ 606 million, respectively. This I would like to thank you, our shareholders, achievement cannot be taken for granted, Alba celebrates its four decades of operations -- for the trust you have placed in me, and in Alba’s considering the many operating challenges that Alba’s inception in the late 1960’s triggered the board and management teams during this first the company faced in 2011, as well as the low industrialization process not only in Bahrain but year as a publicly listed company; I hope your LME levels in the latter period of the year. throughout the region, and also marked the first confidence in us continues in the future. non-oil industrial diversification initiative We have retained our solid financial position undertaken in a Gulf state. 1971 is the year that My sincere gratitude goes as well to Alba’s board from the sustained upward trend in LME marked the inauguration of our industrial plant of directors, its management team, and all of its and were able to increase our revenues to with a total capacity of 120,000 metric tonnes. employees, whom without their expertise and US$ 2,349,000 despite the slump the European Today, the company’s fully fledged operations commitment Alba would not have been able to Cash Payback 300 market has faced since the last quarter of 2011. run with an annual capacity of more than transform its challenges into such exciting 267 880,000 metric tonnes - a 5% CAGR in capacity opportunities.to Shareholders Alba continues to work for the best interest of its since start-up forty years ago. 238 shareholders by committing to invest in organic In conclusion, it gives me pleasure to express my (US$ million) growth and consistently to pay back cash to its A key component to this growth has been a gratitude to His Majesty the King of Bahrain, • 12% Y-o-Y Growth 200 shareholders, while maintaining a strong sustained emphasis on lean management King Hamad bin Isa Al Khalifa; for the guidance balance sheet. In fact, for the 2011 financial year, techniques as well as a continued focus on of His Royal Highness the Prime Minister, Prince Alba paid Fils 0.067 a share. operational efficiency. It has provided the Khalifa bin Salman Al Khalifa; for the support of company with the springboard for achieving its His Royal Highness the Crown Prince and 2011 marked the first anniversary of Alba’s goals for productivity and increased profitability. Chairman of the Bahrain Economic transformation into a commercial entity -- Development Board, Prince Salman bin Hamad 100 through a dual listing on the Bahrain Bourse Viewed most broadly, the 2011 results also Al Khalifa, and to the Government of the and on the London Stock Exchange -- and has reflect the solid fundamentals at work at Alba Custodian of the Two Holy Mosques, His Majesty set the stage for greater emphasis on pursuing and will give us good momentum moving into King Abdullah Ibn Abdul Aziz Al Saud of the sound corporate governance, increased 2012. Looking ahead, Alba remains committed Kingdom of Saudi Arabia, whom without their transparency and industry best practices. As a to future growth through proactive initiatives support Alba’s accomplishments would not have result, Alba has launched its Code of Conduct to building upon a culture of technical excellence been possible.Annual Report 2011 | 6 7 | Annual Report 2011
  6. 6. | CEO’s Message 750 606 600 495 450 CEO’s 300 Message 150 0 2011 proved to be a momentous 2011 proved to be a momentous year in Alba’s Free-Cash year in Alba’s history history since it marked record achievements in both production and sales. These Flow since it marked record accomplishments were particularly significant, 2011 Highlights (US$ million) achievements in in that they took place in the shadow of a challenging year for businesses in the kingdom - A Strong Framework • 22% Y-o-Y Growth both production of Bahrain as well as against the background of for Sustainable and sales volatile aluminium prices. Improvement I am pleased to say that Alba succeeded in overcoming these challenges by recording exceptional performance in 2011. Production figures for 2011 topped 881,310 Alba SmartWay, which was launched in Solutions. Its stated objective is to achieve metric tonnes - the highest recorded metal 2010, continued to set the tone for delivering a record throughout the organization of production in Alba’s 40-year history - and a enhanced competitiveness, greater operational zero incidents causing physical harm, and it substantial leap from the 850,700 metric tonnes efficiency and increased savings across the has succeeded in laying the foundations of produced in 2010. As a result, the sales volume company. Success in adopting continuous important new safety principles within the for the full-year 2011 reached 893,020 metric improvement and lean management company. tonnes versus 854,593 metric tonnes in 2010 techniques as part of Alba SmartWay enabled 881,310 – an increase of 4.5 per cent compared to the us to retain a strong operational focus while Alba’s determination to enlarge the global Production 850,700 1,000,000 previous year. facing the strategic challenges, and setting the footprint of its product portfolio gained stage for us to move toward being a global Growth Alba also benefited from the sustained upward force in the aluminium industry. momentum in 2011 with the opening of sales offices in Zurich, Switzerland and in Hong Kong.(Metric Tonnes) 800,000 LME trend in 2011, and was able to grow its revenues by 18% year-on-year despite the The implementation of Six Sigma in 2011 as These offices will tap into the growing demand for primary aluminium from customers in • 3.6% Y-o-Y Growth slowdown in the European market. EBITDA for part of Alba SmartWay further reinforced the Europe and Asia. 600,000 the year reached US$ 582 million compared to strong fundamentals of Alba and proved to US$ 552 million in 2010 – the 2nd straight year boost quality output, eliminate variability and The completion of the pre-feasibility studies of positive growth. Our Cash Flow performance achieve measureable returns. for the Line 6 expansion project was another was strong as we generated US$ 651 million in key highlight in 2011. The studies aimed to 400,000 Operating Cash Flow and grew our Free Cash Alba was able to generate recurrent savings determine the optimum energy sources and Flow by 22% compared to 2010. This sound worth US$ 173 million in 2011 on a comparable technology solutions for the new proposed pot performance enabled Alba to pay cash back basis to US$ 110 million in the previous year – line as well as look at solutions for future energy 200,000 to its shareholders of US$267 million in 2011 ahead of the set target by US$ 3 million. requirements. as well as allowing the company to reduce the overall debt profile by US$ 175 million, all while 2011 saw another milestone – the launch 0 retaining a very sound balance sheet. of Alba SafeWay with DuPont Sustainable Annual Report 2011 | 8 9 | Annual Report 2011
  7. 7. | CEO’s Message Moving Ahead With a major focus on organic growth, Alba remains determined to reduce its operating costs, achieve additional cash savings per annum of US$ 30 million in 2012 and improve processes through the continuous roll-out of plant wide Six Sigma. The management team is confident that STAR program achievements will enable Alba to be among the lowest cost aluminium producers in the world. In 2012, we will launch the bankable feasibility studies - expected to be completed by the end of the year - for the Line 6 expansion project. With Line 6 fully operative, Alba will be able to increase its production by 400,000 metric tonnes per year, enabling the company to be positioned amongst the largest single smelters in the world. People Who Make It Happen As always, we remain indebted to Alba’s workforce and the Labour Union, who have made 2011 such a landmark year. We extend our thanks and appreciation to our clientele for their utmost trust and confidence. And, I take the opportunity to thank our Board of Directors for their wise stewardship and strategic guidance. Notwithstanding the challenges in 2011, we have had an exceptionally successful year, and our confidence in our vision for the future has further strengthened. We are excited about theH.H. the road ahead and we remain optimistic that, withLate Amir of Alba’s core fundamentals, 2012 will be another success story.BahrainInauguratedthe smelterin 1971Annual Report 2011 | 10 11 | Annual Report 2011
  8. 8. June Operational Alba’s rail replacement project at the Reduction Potlines 1, 2 and 3 wins the MEED Quality Awards Overall Project in the Heavy Industries Sector, which will Highlights ensure continuation September of safe production Announcement operations with of natural gas price May nominal maintenance increase from Albas Line requirements for the US$1.50 per million 5 scores next 25 years British thermal improved metal units (MMBTU) to purity, increased US$2.25 per MMBTU productivity and effective enhanced efficiency. 1 January 2012 September Metal purity 3 Kick-off of was below 700 a 2-year Safety ppm, production Excellence exceeded targets 5 Programme “Alba by 986 metric SafeWay” with the tonnes and current support of DuPont efficiency reached Sustainable 95.9 per cent Solutions 1 7 8 4 June Alba launches December “Code of Conduct” 6 Alba appoints 2 David Zheng as the manager of its new regional June office in September Alba appoints Hong Kong Launch of Six-Sigma Boris Santosi - part of Alba as the sales SmartWay Operational manager for its Improvement Programme - new European supported by Rath & Strong sales office in Consultancy as well as an Zurich, Switzerland in-house core team of specialists in Six-Sigma Annual Report 2011 | 12 13 | Annual Report 2011
  9. 9. 750 600 450 (US$ million)Financial 300 Net Profit 150 368 564Highlights 0 • Net Profit increased by 53% to US$ 564 million • This solid performance was largely due to higher EBITDA levels and 2500 750 unrealised Derivative gains • 53% Y-o-Y Growth 2000 600 1500 450 (US$ million) (US$ million) Revenues 1000 300 2500 300 EBITDA 500 1,997 2,349 150 2000 240 552 631 to Shareholders 0 Shareholders’ 0 1500 180 Cash Payback (US$ million) (US$ million) 1000 120 • Revenues increased by 18% Equity • EBITDA (excluding 500 60 1,858 2,151 due to a healthy shift in LME, Product Mix one-time costs) sound performance 238 267 as well as Pricing Power was driven by higher Revenues 0 0 • The changes in the Product Mix are & record Production levels despite a mainly due to an increase in Value-Added lower trend in Q4 Products and Liquid Metals with • 14% Y-o-Y Growth a decrease in Commodity products • Shareholders’ Equity scored • Cash Payback to shareholders • 18% Y-o-Y Growth US$ 2,151 million due to high levels of increased mainly because of higher Net Profit resulting in an increase level of Free-Cash Flow (FCF) in Retained Earnings • 12% Y-o-Y Growth • 16% Y-o-Y Growth 750 1000 600 800 Free-Cash Flow 450 100 100 600 (US$ million) (US$ million) 300 80 80 400 Net Debt Leverage Ratio 150 60 60 200 Equity Ratio 495 606 899 613 0 40 40 0 20 20 (%) 53 62 48 28 (%) • Free-Cash Flow amounted • Net Debt decreased by (32%) 0 0 US$ 606 million due to strong EBITDA compared to 2010 and outstanding Working Capital • This decrease is mainly attributed to Management repayments of long-term loans • Total Assets remained almost • Leverage ratio improved due • 22% Y-o-Y Growth and reduction in short-term Revolving flat compared to 2010 to a higher equity ratio Credit as well as a net increase in • Shareholders’ Equity increased by and lower Net Debt Cash & Cash Equivalent 16% resulting in an improvement • -32% Y-o-Y Growth of the Equity ratio Annual Report 2011 | 14 15 | Annual Report 2011
  10. 10. | Corporate Governance Corporate Corporate governance practices applied by the Governance Company beyond those required by the law Alba is committed to Alba has adopted, and is committed to implementing both the Corporate Description both the Governance Code of the Kingdom of of the Company’s 2010 Corporate Bahrain (the Code) issued in March 2010administrative, management Governance Code by the Ministry of Industry and Commerce, and supervisory bodies and and the Corporate Governance Module their committees issued by Bahrain’s (the Module) of the Central Bank of Bahrain Ministry of Industry (issued in July 2011). The principles governing these frameworks are: & Commerce, and the 2011 Corporate • The Company shall be headed by an Governance effective, collegial and informed Board; • The directors and officers shall have full Alba’s Board of Directors maintains effective oversight of the Company The Company is headed by a Chief Executive Officer (CEO), who has four Module issued loyalty to the Company; by regularly monitoring key business Executives reporting to him (Chief Financial by the Central • The Board shall have rigorous controls for financial audit and reporting, internal control, activities and providing directives to the Officer, Chief Supply Chain Officer, Chief Bank of and compliance with the law; Management. The Board has ten positions (currently nine members, all of whom are Marketing Officer and Chief Operations Officer (currently also fulfilling the Chief Bahrain • The Company shall have rigorous procedures for appointment, training and evaluation of the external to the company’s management, Supply Chain Officer role). Each Executive Board; plus one vacancy). The Board operates in has a number of Managers reporting • The Company shall remunerate directors accordance with the laws of the Kingdom to him. The Company has a General fairly and responsibly; of Bahrain, the Memorandum and Counsel/ Corporate Secretary, and a Chief • The Board shall establish a clear and efficient Articles of Association of the Company, Internal Auditor and Risk Officer, who management structure; its charter, and the ‘Levels of Authority’ report independently to the Chairman of • The Company shall communicate with documentation. The Board of Directors the Board/ Chairman of the Board Audit shareholders, encourage their participation, and respect their rights; and has two sub-committees. The Board Audit Committee respectively. Committee carries out the Board’s audit • The Company shall disclose its corporate governance practices. functions in accordance with the Board The CEO convenes a weekly executive Audit Committee charter, and also has committee meeting, a weekly extended The Company seeks where applicable, to responsibilities for risk and corporate executive committee meeting of all exceed the minimum requirements of the governance. It has five members, each executives and selected managers, and a Code and Module, and to implement the of whom has a financial and/or audit monthly Safety, Health and Environment additional recommendations and guidance background. The Human Resources Executive Committee meeting consisting of of the Code, as well as other international Committee (HRC) carries out the Board’s all executives and selected HSE managers best practice in Corporate Governance. nominating and remuneration functions and professionals. in accordance with the HRC Charter. Following are some of the key It has three members, all of whom are improvements in Corporate Governance external directors. Relevant members instituted by the Company in 2011: of management attend Board and sub- committee meetings. Annual Report 2011 | 16 17 | Annual Report 2011
  11. 11. | Corporate | CorporateGovernance Governance Directors’ orientation/handbook – A Director’s handbook consisting of key documents and other content on directors’ responsibilities was created during 2011 to serve as a reference guide for incumbent General Counsel and HR Manager, and directors and to facilitate orientation of which reports directly to the Board Audit new directors. Committee. Monitoring tools include an independently operated confidential Directors’ independence – In its 2011 hotline and reporting system that provides review of directors’ independence, the for reporting in multiple languages by Board applied the new guidance from phone and internet 24 hours a day, every the Central Bank of Bahrain as well as the day. previously applied classifications set Corporate Governance Guidelines - The out in the Code. Board of Directors approved the Alba Independent external Board survey, ‘Corporate Governance Guidelines’ at evaluation and training - The Board Conflicts of Interest – Prior to 2011, Alba’s December 2010 Board meeting. This arranged for an independent external policies were already in place prohibiting document is fully aligned with the above Board survey and training workshop to a member of the Board of Directors from Code, and was published on Alba’s website be carried out during 2011 by the GCC voting in any meeting, or participating in early 2011. Board Directors Institute. Feedback from in any business operation or activity, in the GCC Board Directors Institute on the which the member has a conflict of interest Corporate Governance Report - The effectiveness of Alba’s Board and Corporate with the Company. In accordance with Board presented the Company’s first Governance processes was very positive. the Code, abstentions are now required ‘Corporate Governance Report’ at Alba’s Actions are underway to implement During the to be minuted. In addition, the Company 41st Shareholders Meeting in March 2011. This report, (also published on Alba’s improvement recommendations that arose from the survey and the workshop. 2nd quarter of updated its annual Directors’ declaration and reporting process to list directorships website), set out Alba’s compliance with the 2011, the Executive of all Bahraini companies even if no Code and with the additional guidelines, Evaluation and assessment of the Board team launched conflicts are anticipated. together with explanations for areas of non application and required disclosures. and its Committees – In 2010 and 2011, the Board and its two standing sub- a new Code of CEO and CFO Certification of financial committees, the Board Audit Committee Conduct, on a par with statements – The CEO and CFO now Code of Conduct - In December 2010, the Board approved a revised Code of Conduct, and the HRC, conducted annual self- evaluations and assessments using leading international produce a memorandum certifying each quarter’s financial statements, as well as the setting out required ethical conduct for questionnaires and a discussion of gaps codes of ethics, year-end financials. all employees of the Company. This Code, which is on par with leading international and areas of improvement. The results through a codes of ethics, was launched across the of the assessments by the sub-committees were reported to the Board. comprehensive Ownership and trading of company shares – Following the company’s dual Company in June and July 2011 by the communication listing on the Bahrain Bourse and the Executive team through a comprehensive communication and training programme. and training London Stock Exchange in November 2010, a process has been implemented Compliance with the Code of Conduct is program to identify and report Directors’ and monitored by Alba’s Integrity Task Force, Executives’ ownership and trading of which comprises the Chief Internal Auditor, company shares. The Company has issuedAnnual Report 2011 | 18 19 | Annual Report 2011
  12. 12. | Corporate | CorporateGovernance Governance Main features of reviews changes to the risk profile, together the internal control and risk with progress on actions for key risks on a management systems quarterly basis; in relation to the financial • Internal Audit function, working from reporting process a risk-based annual internal audit plan covering key controls. The audit plan, budget, and methodologies are approved and monitored by the Board Audit Committee. On a quarterly basis, the Board Audit Committee reviews and discusses the internal audit findings, recommendations policies on Key Persons Dealing/Insider The Board, through the Board Audit and agreed management actions, as well Trading and circulated these to all directors, Committee, is responsible for ensuring a as progress made against prior audit officers, and other key employees identified sound and effective control environment. findings. Additional private meetings are by the Company, and has established, Monitoring of internal controls is provided held between the Board Audit Committee for all directors and officers, quarantine through a number of internal and external Chairman and the Chief Internal Auditor periods for trading in Alba shares. assurance providers, including: and Risk Officer; • Audits carried out by the National Audit Levels of Authority – In January 2011, • Statutory Audit by our External Auditors, Court, and by Shareholder Audit teams; the Board approved an updated Levels of and discussion by the Board Audit • Board and sub-committee approvals Authority document for the Company. This Committee of the results of the statutory and monitoring of Operating, Financial, document defines the limits of approvals audit, including a review of the financial Manpower and other Plans; and and decision-making authority designated performance, any changes to disclosure, • Executive and management monitoring to specified positions of responsibility a subsequent events review, important activities (including the monitoring of Key within the Company. accounting matters and other internal Performance Indicators). control matters; Succession plans – An annual review of • Review and formal approval of the Assurance is also provided through succession plans for executives is now built financial results by the CFO, CEO, Board application of the Levels of Authority into the Board agenda. Audit Committee and Board; document for financial transactions, • Monitoring by the Risk Management which are also enacted through financial team, of progress against agreed actions for reporting policies and procedures, and financial and other risks identified through through IT controls in the financial the application of Alba’s Board approved reporting system. The revised Code of Enterprise Risk Management Framework, Conduct also sets out clear and specific and with regard to the Risk Appetite set expectations for accurate financial by the Board. The Board Audit Committee reporting.Annual Report 2011 | 20 21 | Annual Report 2011
  13. 13. | Corporate | CorporateGovernance Governance The cyclical nature of the Company’s industry has historically meant that there results of operations and future prospects; is significant • The Company’s business may be affected by shortages of skilled employees, aluminium (including management), labour cost Principal risks price and inflation and increased rates of attrition; and uncertainties faced demand • The Company depends on the provision of uninterrupted transportation services by the business volatility for the transportation of raw materials and finished products across significant distances. Prices for such services (particularly for sea transport) could increase; • The Company has a number of hedging We encourage you to carefully consider • Fire, equipment breakdown, civil strike contracts, and has historically experienced the risks described below. Their occurrence or unrest, or loss of gas, power or other significant mark-to-market and realised could have a material adverse impact utilities may result in loss of operational losses from certain of the Company’s on our business, financial condition and capability or shutdowns for significant derivative positions; results of operations, and could result in a periods; • The Company is exposed to foreign decline in the trading price and liquidity of • The loss of either of the Company’s two currency fluctuations, which may affect its our securities. Our systems of governance, largest customers, or its inability to recover financial condition; internal control and risk management the receivables due from either of them, • There is a high level of competition identifiy and provide responses to key risks or the long-term loan extended to one of in the GCC aluminium market, and the through the establishment of standards them may have a material adverse effect on Company may lose its market share in and other controls. Any failure of these its financial condition and future prospects; the GCC as its competitors increase their systems could lead to the occurrence, or • The Company relies on third-party production levels; re-occurrence, of any of the risks described suppliers for certain raw materials, and • The Company’s strategy includes growth below. any disruption in its supply chain or failure and expansion of its operations, as well as to renew these contracts at competitive cost savings initiatives, which may not be • The cyclical nature of the Company’s prices may have an adverse impact on the achieved on time or on budget; industry has historically meant that there Company’s financial condition, results of • The Company does not insure against is significant aluminium price and demand operations and future prospects; certain risks, and some of its insurance volatility, and a general production • The Company’s competitive position coverage may be insufficient to cover overcapacity in the industry; in the global aluminium industry is actual losses incurred; and • The Company has no control over a highly dependent on continued access to • Changes in laws or regulations, or number of factors that affect the price of competitively priced and uninterrupted a failure to comply with any laws or aluminium; natural gas supply. An increase in the price regulations, may adversely affect the • The Company operates in an industry of natural gas, or interruption in its supply, Company’s business. that gives rise to health, safety, security and could have a material adverse effect on the environmental risks; Company’s business, financial condition,Annual Report 2011 | 22 23 | Annual Report 2011
  14. 14. | Products and Markets Outlook in 2012 Europe 16% Bahrain Although market demand will face some 48% challenges as compared to 2011, Alba’s capacity has been contracted for, and the Products company will aim to maximize its output of Value-Added Products. Although the Other overall market continues to be in a surplus MENA position, this is primarily on the commodity and Markets 20% ingot side whereas there is a shortage in terms of Value-Added Products. Despite some political uncertainties in key MENA countries, market trends are positive and well supported by infrastructure spending as well as a housing boom. Region Highlights 2011 Despite the concerns related to European for 2011 sovereign debt, which triggered cautious inventory management, the clear pickup in the US economy as well as in Japan should Asia support demand in 2012. 16% In terms of tonnage, overall market trends have been positive through most of 2011 with key fundamentals supporting demand: Casthouse 2011 • Prices of most competing materials Performance remained high over the year relative to aluminium and will continue to be so in Ingot 2012, helping to speed substitution effects 9% (especially in the rod and cable market). • Automotive and packaging downstream Billet The casthouses have maintained their markets sustained their overall good 39% overall efficient performance: performance in Europe and in Asia • Billets production reached 332,406 supported by changing life-styles and metric tonnes - up by 6% from 2010; urbanisation. Slab foundry alloys output was 91,523 metric • Chinese consumption and production 14% tonnes (slightly behind 2010) while slab have increased dramatically, and in parallel, volumes increased to 127,255 metric although China is bound to become a net tonnes - up by 11,615 metric tonnes from importer. the previous year. • The slowdown in Q4 was a severe • Overall Value-Added Production was reaction to perceived risks in financial 549,185 metric tonnes - higher by 3% markets and the slowdown in Europe, but as compared to 2010. should be temporary • The LME trend has been bullish, with an annual average of US$2,398.29 per metric Product 2011 Foundry tonne even though Q4 cash average settled 10% at US$ 2,089.18 per tonne. Liquid 28%Annual Report 2011 | 24 25 | Annual Report 2011
  15. 15. | Productsand Markets Our downstream markets are producing a variety of products: • Our liquid metal is sold to various Bahraini industries, but most significantly Downstream to MIDAL, one of the world’s leading cable Markets and rod manufacturers. • Our billets are sold to Aluminium extruders, who are using the versatile properties of aluminium alloys to create profiles in all shapes and sizes that are mainly used in building applications, such as window frames or structural components. A growing share of aluminium profiles is also used in cars or vehicles where light weighting is becoming a priority. Aluminium components give shock absorption as well as mechanical strength capabilities with less weight than the equivalent properties of pieces produced in steel. • Our slabs are used by rolling mills to produce foilstock which is then rerolled into household foil or packaging material used in food or pharmaceutical industries. H.M. King Other types of slabs are rolled into plates or Hamad Bin sheets used in the general engineering and Isa Al Khalifa building industries. • Our foundry alloy ingots are used by toured the automotive components manufacturers to Casthouse produce cast wheels or engine blocks. in 1993Annual Report 2011 | 26 27 | Annual Report 2011
  16. 16. | Health, Safety and Environment Health, Safety and Environment Alba SafeWay Alba’s role as a transformational Alba recognises that to be a world The launch in 2011 of the Alba SafeWay leader is demonstrated through its track leader in workplace safety, health and project in partnership with DuPont Alba recognises record in the areas of health, safety and environmental management systems, Sustainable Solutions began with an that to be a world leader environment. The primary incentive for this success has been the priority given, visionary statements must translate into concrete action plans; hence, 2011 has objective of achieving zero incidents causing physical harm throughout the in workplace safety, health throughout the forty years that Alba has been marked with a series of initiatives that organisation. It sets out to define the state and environmental been in operation, towards developing have brought the company a step closer of Alba’s safety culture, shape employee management systems, a safe work environment – one that will benefit both employees and the wider towards actualising these goals. behaviour and analyse the effectiveness of current HSE management systems as well visionary statements must community. In 2011 Alba restructured to create the as their level of implementation across the translate into concrete As one of the world’s largest aluminium Health, Safety & Environment (HSE) Department, streamlining all activities company. action plans smelters and a regional pioneer in under its scope in order to provide strategic The first phase of the project involved a aluminium production, Alba regards direction to raising Alba’s global profile as a Safety Perception Survey, which helped this safety focus as critical to its being responsible company in these matters. assess attitudes and perceptions that Alba recognised as a responsible industrial employees held towards safety, and also organisation. It has also paved the way in to measure the maturity level of the safety formulating the company’s work culture, culture that exists within the company. defined the way the company conducts With a total of 2,014 employees taking part its operations, and set the safety in the survey, the results clarified overall parameters for the various processes strength in leadership, structure, process currently deployed in producing Alba’s and actions in relation to developing a high grade aluminium products. company wide safety culture.Annual Report 2011 | 28 29 | Annual Report 2011
  17. 17. | Health, | Health,Safety and Safety andEnvironment The HSE Department Environment conducted year-round safety awareness campaign to encourage safe behaviour Health amongst employees Watch The second phase – which began in Among other initiatives undertaken in October 2011 – laid the groundwork for the 2011, the HSE Department conducted a introduction of new safety principles. Some year-round safety awareness campaign of its main features were: encouraging to encourage safe behaviour amongst a proactive approach in preventing employees. The campaign elements Alba remains at the forefront of ensuring work related injuries, emphasising the included safe driving, guarding against that employees benefit from a safe work responsibility of company leaders in heat exhaustion, safe use of tools, and environment that enables them to be demonstrating safe behaviour through general promotion of good health healthy and productive. At the centre their example, considering compliance campaign, amongst others. of Alba’s occupational health initiatives with safe procedures and values to be is the Alba Health Centre that is widely non-negotiable, correcting any deviations Extending the campaign’s focus towards regarded as one of the most advanced immediately, learning from incidents to an external audience as part of a policy medical facilities available in any industrial prevent recurrence, etc. of engaging with the community, school organisation in Bahrain. visits were conducted to impart the As a means to put these principles into importance of safety amongst the young One of the highlights of 2011 was the Heat action, the development of an Alba safety as well as provide on-the-job training for Stress Standard that was launched during improvement framework started with the students at the HSE Department, through a workshop in the summer. As a proactive formation of relevant sub-committees to a sponsorship agreement signed with method in safeguarding Alba employees manage and implement safety policies and Tamkeen. from severe heat exhaustion, it involved procedures. A Central Safety Committee raising awareness of heat severity through with six sub-committees along with a Alba’s involvement in the Gulf Aluminium daily communication of the current heat stand-alone Communication & Campaign Council HSE Committee in 2011 was index. This was the first such programme Committee were set up to ensure that reflected through its contribution and undertaken in Alba’s 40-year history, and it the programme remains sustainable and participation in activities that included proved to be highly effective in mitigating achieves the required standard. exchange of best practices, safety the hazards of extreme summer heat. standards, plant visits, audits, etc. As well, studies were undertaken to assess Alba continued to maintain the the health benefits of using face-masks at requirements of its OHSAS18001 certificate the pot lines, and in the second half of the after due verification by a third party. year, its usage was made mandatory. HSE training programmes for Alba Among the company wide health employees were strengthened in 2011 campaigns launched in 2011 were those and were mostly conducted by in-house addressing manual handling, ergonomics, experts who benefited from exposure to heat exhaustion, noise pollution, etc. Leadership related academic programmes, seminars, in Safety conferences and plant visits in 2011. Many of the department staff are certified NEBOSH holders and will be given the opportunity to pursue higher studies – including PhD – to improve and enhance their knowledge.Annual Report 2011 | 30 31 | Annual Report 2011

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