Indian aluminium company Nalco (National Aluminium Company) is looking to expand outside India.
According to press reports inside India, Nalco’s Chairman and Managing Director Ansuman Das told employees at its annual meeting that Nalco had approached 6 countries with a view to examining the potential for an aluminium smelter Joint Venture. The 6 countries have been named as Indonesia, Vietnam, Malaysia, Qatar, Oman and Iran.
In my view, this is clearly a fishing exercise. Each country offers different opportunities but significant challenges - Indonesia has bauxite but would need a power station and infrastructure. Qatar and Oman offer capital and some gas leases, but would they have enough spare gas to divert to another aluminium smelter? And would Sohar or Qatalum welcome a competitor in their midst? Salaries at some Middle Eastern plants are very high due to the conditions, so another employer would compete with the incumbents for scarce technical specialists, and push salaries up further.
We are now in mid 2014, and if Nalco is only at the stage of performing a shotgun approach to half a dozen countries, then I feel comfortable in predicting that we won’t see an operating smelter emerge from these approaches any time this decade.
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