Sohar Aluminium smelter has produced more than 3.7 million tonnes of finished product since it started operations in 2009. 10 years of continuous achievements in all areas
by Roberto Guccione
One decade ago with a wealth of natural resources and petrochemicals, Oman embarked on a mission to create a thriving aluminium industry which would contribute to the economic development of the country. Sohar Aluminium (SA) was formed in September 2004 and inaugurated in 2009; the company is jointly owned by Oman Oil Company, Abu Dhabi National Energy Company PJSC-TAQA and Rio Tinto-Alcan. As the journey continues, the company can look forward to the future with genuine optimism towards the next chapter of the history. By utilizing cutting-edge technology, the company has maximized productivity and plant performance: the smelter produces 375,000 mton/y of high purity aluminium per annum. This has had a growing, positive impact on employment opportunities and business development. By consistently enhancing and optimising processes to produce high quality aluminium in the most efficient and environmentally-conscious way, SA has become benchmark smelter operators. The company continues to develop plans for metal production and power generation by utilising state of the art technology and by constantly upgrading the skills of its employees.
A leader in the aluminium Industry
Oman’s unique geo-economic location allowed Sohar Aluminium to attract some of the largest companies in the world and as a result, the last decade created a window of opportunity for it to cement a position as a global leader within the industry. As the company responsible for the Sultanate of Oman’s first and only greenfield aluminium smelter, Sohar Aluminium was a landmark industrial development project which has become a key contributor to Oman’s sustainable development ambitions and long-term prosperity. From the outset, Sohar Aluminium has focused heavily on bringing prosperity and sustainable growth to the Al Batinah region, to the neighbourhoods, then to the cities and for the benefit of the entire nation. SA embodies a culture of productivity effectiveness while always maintaining a quality-driven mindset, and has become a benchmark smelter through consistently enhancing and optimising the processes to produce quality aluminium in the most efficient and environmentally-conscious way possible. The aluminium industry is part of a dynamic and ever-changing market, where new challenges are constantly arising. In order to maintain the quality operations and competitive advantage, SA uses a systematic approach of lean manufacturing principles and capital improvement projects to significantly improve the productivity through waste minimization efforts, higher process efficiency, standardized cycle time and material costs.
Commitment to support downstream job creation
Since supplying the first hot metal delivery to downstream customers in August 2008, the company has established successful relationships with third-party downstream producing subsidiaries. The partnerships with Oman Aluminium Processing Industries LLC (OAPIL), Oman Aluminium Rolling Company LLC (OARC) and Oman Aluminium Cast LLC (OAC) have formed an essential part of SA’s overall strategy to promote and support the creation of a robust downstream aluminium industry in Oman.
SA is offering them proximity to raw materials, a significant value proposition that provides our downstream customers with a distinct energy cost advantage. This initiative is also in synergy with the intent to build beneficial relationships with local suppliers as well as customers from Oman and abroad in order to deliver sustainable In-Country Value (ICV) for Oman. As the volume of liquid metal sold directly to the company’s downstream partners increases each year, the organization continues to stimulate the Omani economy.
In August 2018, Sohar Aluminium partnered with its latest downstream customer, Synergies Castings LLC, the leading manufacturer of aluminium alloy wheels in India, thereby Sohar Aluminium will meet its goal of supplying 60% of its hot metal production to its downstream customers while the rest is exported in the form of solid ingots and sows. Synergy Castings LLC will construct a USD 100 Million hi-tech alloy wheel manufacturing plant situated in the Sohar Industrial Estate adjacent to Sohar Aluminium premises. This new facility will be a further positive stimulant towards Oman’s economic growth, and will create new forms of employment for highly-skilled talent and develop more training opportunities for Omanis.
Building and developing local talents
SA’s pride and most valuable asset is undoubtedly its workforce, and the company considers this as a community of staff which fully embodies the core values.
The board of directors made an early business decision to provide professional training for the entire workforce, and this was essential to maintain high quality standards across the company, particularly since it is in a sector which is extremely safety conscious. This direction created an opportunity to recruit, train and develop an increased number of Omanis to operate, maintain, supervise and manage the business. As SA is the only aluminium smelter operator in the country, the task of hiring local employees with prior exposure to the industry was extremely difficult. To overcome this, the company invested in programs which provided educational options for Omanis in Engineering, Maintenance, Plant Operation and other fields of related expertise. The company also established in 2007 a training centre which was certified as a Training Institute by the Ministry of Manpower in July 2016.
As the operations matured, a dedicated and highly motivated workforce was developed which shares SA’s commitment to efficiency and excellence and strives to create a positive impact; the Omanization rate of 76% in 2019 is the company’s highest ever national employment figure distributed across all levels and functions. Together with a focus on local employment, capacity building, competitive benefits and employee engagement, Sohar Aluminium continues to aspire and develop a united and engaged community.
Contribution to social and economic development in the country
Local economic development and the creation of In-Country Value (ICV) are central aspects of SA’s economic considerations. The company continues to make a significant contribution to the national economy and has an important national impact on job creation and social development. Through an increase in hiring more Omanis and an intensive focus on increasing the local supply base while supporting aluminium downstream factories to supply hot metal, SA has had an increasing impact on the economic development of the surrounding regions by increasing income and improving lifestyles. This has not only impacted on Sohar’s economic development, it has also improved the national GDP of the Sultanate.
Given the vital role that local vendors and small or medium-sized enterprises play in creating social growth and economic stimulation, Sohar Aluminium is committed to developing partnerships with local Omani suppliers as a means of improving our supply chain and contributing to local economic development. Although a number of products, such as machinery, primary raw material and alumina, is sourced internationally, the company continues to grow its partnerships with local manufacturing companies as it focuses on identifying items and services that can be procured locally. SA’s procurement of local goods and services constitutes on average 58% of our total purchases (except raw material). Through the continued efforts to build a local supply chain, the company has developed a strong network of nationally-based suppliers who provide a variety of goods and services, from administrative items to specialised manpower, representing a significant opportunity to enhance the Omani metals and manufacturing sector while reducing costs and product delivery time.
Committed to build a safety culture and preserve the integrity of the environment
The company’s approach is to maximize shareholders and social value by responsible and sustainable operation of our business, while always maintaining a safety and quality-driven mind-set. As an organization, Sohar Aluminium adopts a policy of reliability whereby meeting the highest customer expectations for product quality, while maintaining environmentally-friendly smelting operations. The organization remains fully committed to protecting the environment, preventing pollution, and the responsible care of natural resources. Ultimately, Sohar Aluminium is focused on playing a leading role in contributing to Oman’s development, while simultaneously minimizing the environmental footprint.
Maintaining a strong integrated Environment, Health and Safety (EHS) Management System is critical to Sohar Aluminium’s success. In line with the customer and stakeholder expectation Sohar Aluminium continuously strives for zero harm to personnel and environment. To meet this expectation SA is an ISO14001 and OSHAS 18001 compliant company. To deal with the diverse and complex environmental issues associated with the operations, Sohar Aluminium’s comprehensive environmental management system helps facilitate the realisation of important EHS objectives and includes environmental performance standards. The Environmental Steering Committee chaired by senior management contributes to the continual improvement of the environmental performance. The company is equally committed to fostering a healthy working environment for all its employees, SA occupational health services include medical surveillance, health promotion and health education, occupational health visits and inspections, counselling, and biological monitoring. Whilst maintaining a health workforce Sohar Aluminium has incorporated the highest safety standards within each of its operations. The injury frequency rates and first aid treatments have significantly dropped over the years, and the company’s non blame culture for reporting of incidents, accidents or unsafe conditions support employees to actively report and seek areas of improvement.
Long lasting contribution to society and all parties of interest
As an organization, SA remains fully committed to support sustainable development in Oman, particularly in the Al Batinah region. From day one, the company concentrated effort on fostering the all-round development of the country focusing on serving Oman with national pride. SA is dedicated to contributing towards a robust Omani economy through investment and by supporting local communities. Social commitment is a key element of the company’s strategy to develop targeted sustainable programs which seek to improve the quality of life for those the company comes into contact with. This is achieved through responsible business conduct and voluntary outreach programs, which bring direct and tangible benefits to communities which reside alongside where the company operates. SA’s social responsibility initiatives are concentrated on strategically sustainable ventures, following a community-centric approach, which has had the effect of positively establishing the credentials as a people-friendly company.
The company allocates 1.5% of annual profits towards corporate social responsibility projects, most of this is invested in Jussor, a non-profit social responsibility organization jointly founded by Sohar Aluminium, Vale Oman Pelletizing Company LLC and Oman Oil Refineries and Petroleum Industries Company S.A.O.C. in 2011. Jussor contributes to and supports social and economic development initiatives in Al Batinah, the organization focuses on four key pillars: Entrepreneurship, Education for Work, Health and Environment and Culture and Sport.
Growth and innovation
Sohar Aluminium recently unveiled its new business strategy which incorporates a new strategic objective called Innovation and Growth. The previous interpretation of the strategy represented a strong fort and part of the Omani heritage with the values of strength, confidence and integrity, now it is time for development and growth. SA is today at a very exciting phase of transition from ensuring stable operations towards growth and sustainability. Through this objective SA is planning to lead by leveraging on breakthrough innovations in aluminium smelting as well as from alternative power generation aiming for long-term sustainability.
Sohar Aluminium is today a leader in the world aluminium industry with a strong financial positioning, for the past ten years SA’s staff has been the strength of the company. Since the foundation the company has celebrated several significant milestones and many record-breaking achievements in all different areas, no doubt that these values will continue to carry the company further along the long journey and create even more good results.
As Sohar Aluminium’s CEO, Said Al Masoudi, declared, there are all the conditions to ensure that the company’s trends will progress successfully in the future, creating further added value not just for the Al Batinah region but for the entire Sultanate.