Value creation: Central to the value proposition and cost-competitiveness of Synergies Casting Oman is a commitment by Sohar Aluminium to meet its requirement of aluminium as feedstock in the form of hot metal.
Seeking to enhance value creation from its operations, Sohar Aluminium has pledged to supply hot metal from its smelter in Suhar Industrial City as feedstock to a first-of-its-kind alloy wheel manufacturing plant currently under commissioning nearby.
Synergies Casting Oman (SCO), set up with an investment of RO 42 million, has commenced trial operation of its high-tech plant that specializes in the manufacture of high-end aluminium alloy wheels for the global automotive industry.
The facility, billed as the only one of its kind in the Middle East, is slated for commercial launch before the end of the current quarter. At full capacity, the plant will manufacture 1.2 million alloy wheels for export primarily to markets in the United States and India.
Central to the project’s value proposition and cost-competitiveness is a commitment by Sohar Aluminium (SA), which is owned 40 per cent by OQ (part of Oman Investment Authority), to meet its requirement of aluminium as feedstock in the form of hot metal.
In exclusive remarks to the Observer, SA CEO Said al Masoudi (pictured) said Synergies Casting Oman is the latest addition to a set of downstream companies that rely on the aluminium smelter for their hot metal needs.
“SA is committed to supply the full current requirement of hot metal to Synergies Casting per the volume specified in the contract,” Al Masoudi said. “The hot metal offtake has started with small trial lots and will increase gradually to reach full capacity as per the contract.”
Benefitting from SA’s hot metal supplies are three other downstream processing firms: Oman Aluminium Processing Industries (OAPIL), the country’s leading manufacturer of aluminium rods and overhead line conductors; Oman Aluminium Rolling Company LLC (OARC), which produces flat-rolled aluminium products; and Oman Aluminium Cast LLC (OAC), a specialised aluminium horizontal cast house that produces high current bus bars required by aluminium smelters and other electrolysis plants as well as specialised castings.
All three plants, along with Synergies Casting Oman, are located in the close vicinity of SA’s smelter, enabling the transfer of hot metal in specially designed mobile transport vehicles to each facility. Delivery of the feedstock in its pure molten state ensures significant energy savings for the recipient companies, among other operational benefits.
Significantly, with Synergies’ contract now in effect, SA’s cumulative supply commitment to local customers has now ramped up to 60 per cent of the total metal produced, said Al Masoudi.
“SA’s long-term strategy has been to supply 60 per cent of its metal to downstream customers. With Synergies in operation, there are four downstream industries producing value added products which are used in domestic and international markets,” the CEO stated, noting that all of SA’s aluminium production volume is now committed against long-term agreements.
Sohar Aluminium is jointly owned by OQ (40 per cent), Abu Dhabi National Energy Company TAQA (40 per cent) and Rio Tinto (20 per cent). The balance of 40 per cent of the smelter’s aluminium output, which is a total of around 395,000 tons per annum, is sold as ingots and sows on the international market.
