Gulf Extrusions unhit by US sanctions

dubai — Gulf Extrusions, a unit of Al Ghurair Group that produces aluminium products, said it has not been affected by the sanctions imposed by the US last year as it remains focused on Europe and is also targeting India as a new market, its chief executive said.

“We are now exporting only small quantities to the US, so the tariffs didn’t have an effect on us. Interestingly, after the levy of tariffs, some companies from the US came to us for additional quantities. So, the US’ levy of tariffs is completely against logic,” said Christian Witsch.

In March 2018, US President Donald Trump had imposed a 25 per cent tariff on imported steel and 10 per cent tariff on aluminium products exported to the US.

“The challenge for the US is that they are short of aluminium. The US’ intention of input tariff on aluminium was to generate working places. Since the aluminum industry in the US depends on imports, what is the meaning of imposing tariffs? It is counterproductive. When you look at the impact of tariffs on the US economy, it is actually negative. They still have to import high quality aluminum from Emirates. The imports became 10 per cent more expensive and it didn’t trigger additional working places also for the US,” Witsch said during a recent interview with Khaleej Times.

He noted that it takes years to build a new smelter and costs a lot of money. “It only makes sense if you have a good price and energy sources. Even the US is not a lowenergy-priced country. Normally, aluminium smelters survive where they have access to natural gas or hydropower — like here.”

Gulf Extrusions sees strong growth opportunities in India, especially for high-quality products in the architectural sector and automotive and industrial applications. In addition, Egypt and Africa also offer strong export growth prospects for the firm.

Automotive: Next growth driver

Witsch sees the automotive sector to be a key driver for Gulf Extrusions and the aluminium industry in the years to come, thanks to increased usage of aluminium in new-age cars. The company now supplies over 4 million parts fabricated for the automotive industry.

“There is a new trend in mobility of electric cars. The battery boxes and quite a large part of batteries are made of aluminium for electric cars. This helps extend the range of the car because aluminium is lighter than steel. Hence, there is a strong demand for aluminium from automotive; and cars like Tesla and Nissan Land Rover are switching to aluminium because it offers better driveability of cars as well as less consumption of fuel,” he added.

Witsch said Gulf Extrusions can quadruple its volume in the global automotive business in a couple of years. “This is very important because it will give us diversification and grow outside architectural products,” he added.

After the levy of tariffs, some companies from the US came to us for additional quantities

Christian Witsch, CEO, Gulf Extrusions