EGA Strengthens Recycling Capacity With Germany's Leichtmetall Purchase

Emirates Global Aluminium (EGA), the world's largest producer of 'premium aluminium', has signed a binding sale and purchase agreement to acquire Leichtmetall Aluminium Giesserei Hannover GmbH, a German aluminium recycling firm. The transaction is expected to be completed by the first half of 2024, subject to regulatory approvals. This acquisition marks EGA's first major purchase since its formation through the merger of Dubai Aluminium and Emirates Aluminium a decade ago.

Leichtmetall is a specialty foundry based in Europe, known for producing hard alloys and larger diameter billets with a high proportion of secondary aluminium. The company utilizes renewable energy at its plant in Hannover, Germany, to produce up to 30 thousand tonnes per year of aluminium billets. Around 80 percent of the input material used by Leichtmetall is secondary aluminium.

Leichtmetall's production includes hard alloy billets with diameters up to 1,150 millimetres. These billets are used in manufacturing high load bearing extruded profiles and large forged components. The company's customers are primarily located in Germany, Italy, and France.

The acquisition of Leichtmetall presents an opportunity for EGA to develop a recycling business in close proximity to its European customers. Additionally, it contributes to the emerging circular economy and aligns with EGA's goal of becoming a low-carbon aluminium producer. The acquisition reinforces EGA's position as one of the leading importers of primary aluminium in Europe.

Abdulnasser Bin Kalban, CEO of Emirates Global Aluminium, stated that the acquisition of Leichtmetall adds significant value to EGA and positions the company for growth opportunities in low-carbon primary and recycled aluminium. He also mentioned that it allows EGA to contribute to the circular economy and work towards achieving net-zero greenhouse gas emissions by 2050.

Adel Abubakar, CMO of Emirates Global Aluminium, highlighted that the acquisition of Leichtmetall enhances EGA's ability to meet high-end aluminium demand in Europe. He emphasized the importance of Leichtmetall in achieving EGA's carbon emissions reduction goals.

Thomas Witte, CEO of Leichtmetall, expressed excitement about becoming part of EGA. He believes that joining forces with EGA will provide Leichtmetall with additional resources and opportunities to grow the business. Witte also mentioned that the transaction will benefit Leichtmetall's existing customers and help secure new opportunities for the company.

Steffen Görig, CEO of Quantum Capital Partners GmbH (QCP), the investment fund that manages Leichtmetall Holding GmbH, expressed confidence in EGA's ability to take Leichtmetall to the next level. He praised Leichtmetall's development under QCP's ownership and highlighted its growth into an innovative and sustainable supplier of specialty aluminium products.

Recycling aluminium is an energy-efficient process that requires 95% less energy than producing new aluminium. It also results in significantly lower greenhouse gas emissions. The demand for recycled aluminium is expected to grow from 27 million tonnes per year in 2022 to 57 million tonnes in 2040. Recycled aluminium is projected to account for a significant portion of global aluminium supply growth in the coming decades.

EGA currently exports over 600 thousand tonnes of primary aluminium to Europe annually and is a key supplier to industries like automotive and construction. Last year, EGA began construction of the largest aluminium recycling plant in the UAE, with a production capacity of 170,000 tonnes per year. The new facility, named RevivAL, will provide low-carbon metal to both local and global markets.

EGA has made a commitment to achieve net-zero greenhouse gas emissions by 2050, aligning with the UAE's Net 50 by 2050 Strategic Initiative. The company has already started producing aluminium commercially using solar power and has developed a product called CelestiAL. EGA plans to reach its carbon reduction goals through a combination of primary aluminium production and the use of recycled metal. With the acquisition of Leichtmetall, EGA is poised to strengthen its position as a leading global aluminium producer while contributing to sustainability efforts in the industry.