News Column

Bamco role in region unique

September 1, 2014



Bahrain Alloys Manufacturing Company (Bamco) has been producing at capacity over the past two years and remains the only producer not an aluminium smelter making small ingots of wheel and cylinder head alloys for smaller-tonnage customers.

In the Gulf, wheel alloys are made by Alba, Dubal, Emal and Qatalum. "Our customer base is someone who takes 20 to 100 tonnes a month whereas a smelter customer base has parties taking 200 to 1,000 tonnes," said Bamco general manager Graham Banister. "We've set up a relationship with our customers, a very strong and even personal relationship and many are friends of the company. This has been one of our strengths."

Wheel alloys constitute a major portion of Bamco's sales value but in recent years the company has been paying more attention to making cylinder-head alloys "so we don't compete as much with the smelters," said Banister. "The net returns are about the same for cylinder head products. In the early years of Bamco, wheel alloys made up 90 per cent of our sales value. Now it makes up 25 per cent."

Banister: manufacturing focus has veered towards cylinder-head alloys

Wheel alloys are a part of Bamco's foundry alloy output of 25,000 tonnes per year produced with the use of two furnaces of capacity 15 tonnes each. Sixty per cent of the foundry alloy output is earmarked for the automotive industry, of which 40 per cent is cylinder-head alloys for cars and wheel alloys. The remainder of the foundry alloy production is used for die casting operations by people who make pumps, pistons and cables.

As well as foundry alloys, Bamco makes master alloys with annual capacity of 5,000 tonnes to give the company a total production capacity of 30,000 tonnes per year.

Bamco purchases from Alba 20,000 tonnes of aluminium as liquid and 5,000 tonnes as solid metal.



NEARLY ALL OUTPUT EXPORTED

Nearly all of Bamco's production is exported. It exports foundry alloys in 7 kg ingots to 26 countries. Its biggest markets are India and Indonesia, both taking equal amounts and accounting for 40 per cent of exports. Europe accounts for 15 per cent, Japan 12 per cent, Malaysia and South Korea 6 per cent each. Exports also go to countries including the US, Mexico, Africa, Australia and New Zealand. Saudi Arabia is one of the importers while in the home market of Bahrain, Gulf Aluminium Rolling Mills (Garmco) is a buyer of master alloys.

A stage in the alloy-making process

Master alloys are made with the use of two induction furnaces, each of two-tonne capacity, Bamco is the largest producer in the world of a product called aluminium silicon 50 per cent primary grade. It accounts for about 80 per cent of the master alloys it makes, roughly 350 tonnes per month. Markets order the product for remelting and buyers include Garmco and Alupco, Saudi Arabia. The Saudi intake of master alloys is about 40 tonnes a month. Outside the region, they are exported to Europe, which accounts for 200 tonnes, and South Africa and Malaysia, 100 tonnes each. Smaller tonnages go to the USA, Australia and Thailand.

Bamco commenced production in 1996 and more than a decade later it faced a major challenge during the global economic downturn for a period after 2008. "The financial crisis changed the whole landscape," recalled Banister. "We had to change focus in our markets, change our products, our destinations, and our payment terms all within a period of one to two months to survive, although our business to India, Pakistan and Australia was still good. There was a slump in profits. In 2011 we got back to our traditional markets which were mainly in the automotive industry."


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Source: Gulf Industry


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