EGA solidifies its global presence with the acquisition of German recycling firm Leichtmetall

Emirates Global Aluminium (EGA), the world's leading producer of premium aluminium, officially sealed a significant deal on March 21, 2024. The aluminium giant from the GCC region has signed a binding agreement to acquire Leichtmetall, a renowned aluminium recycling company based in Germany.

Leichtmetall is a European speciality foundry that produces hard alloys and larger-diameter billets containing significant proportions of secondary aluminium.

EGA intends to acquire 100 per cent ownership of the company currently held by Leichtmetall Holding GmbH, a subsidiary under an investment fund managed by Quantum Capital Partners GmbH. Pending regulatory clearance, the acquisition is anticipated to be completed in the first half of 2024.

Abdulnasser Bin Kalban, the Chief Executive Officer of Emirates Global Aluminium, said, “This acquisition provides EGA a platform to develop a recycling business close to our customers in Europe, contributing to the emerging circular economy and building on our existing position as one of the biggest importers of primary aluminium on that continent. Leichtmetall will grow as part of EGA. The acquisition of Leichtmetall adds significant value to EGA and, alongside the recycling facility we are building in Abu Dhabi, is just the first step for EGA in capturing growth opportunities worldwide in low-carbon primary and recycled aluminium, expanding our business and enabling us to reach net zero greenhouse gas emissions by 2050.”

EGA's recent acquisition marks a significant milestone, being its first major purchase following the merger of Dubai Aluminium and Emirates Aluminium a decade ago. Leichtmetall, located in Hannover, Germany, utilises renewable energy in its operations, producing approximately 30 thousand tonnes annually of aluminium billets, with secondary aluminium comprising roughly 80 per cent of its input materials.

The company utilises its proprietary inductive melting technology, liquid metal treatment, and casting processes honed over four decades to produce top-tier products from scrap metal. These products cater to demanding applications characterised by their exceptional quality and specifications. Leichtmetall's production primarily comprises hard alloy billets reaching up to 1,150 millimetres in diameter. These billets find application in manufacturing high-load bearing extruded profiles and exceptionally large forged components. Leichtmetall has customers across Europe, particularly Germany, Italy, and France.

Adel Abubakar, the Chief Marketing Officer of Emirates Global Aluminium, said, “The acquisition of Leichtmetall greatly enhances our ability to meet European high-end aluminium demand, operationally and commercially, as well as contributing to our carbon emissions reduction aspirations. Leichtmetall and the 170 thousand tonnes per year aluminium recycling facility we are building in the UAE are together a strong combination which will be part of shaping the future EGA, enabling us to support our global customers in meeting their future carbon intensity and properties requirements for their metal.”

Thomas Witte, the Chief Executive Officer of Leichtmetall, said, "Becoming part of EGA, the largest 'premium aluminium' producer in the world, will unlock additional capital and resources for Leichtmetall to grow our business further, continue developing our technology, and strengthen our ability to partner with international customers in Europe and beyond. This transaction is great news for our existing customers and will help us secure new opportunities while playing a key role in the growth of EGA's wider recycling business." ​ ​

Steffen Görig, the CEO of Quantum Capital Partners GmbH (QCP), said, "As a manager of speciality carve-out investment funds, our job is to enable high-potential companies like Leichtmetall to develop and prosper. When Leichtmetall came under our wing ten years ago, it was an overlooked operation with a limited customer base. Under Quantum Capital Partners' ownership and Thomas Witte's extraordinary leadership, Leichtmetall has developed into an innovative, sustainable supplier of speciality products that are highly valued across multiple industries. Leichtmetall's slogan is 'making aluminium stronger'. With this transaction, we are making Leichtmetall stronger, trusting EGA to take the company to the next level."

Aluminium boasts infinite recyclability, requiring a mere 5 per cent of the energy needed for new metal production and emitting significantly fewer greenhouse gases. Market projections anticipate a surge in global demand for recycled aluminium, with estimates soaring from 27 million tonnes annually in 2022 to 57 million tonnes by 2040. It's anticipated that recycled aluminium will drive 60 per cent of global supply growth by 2030 and 70 per cent by 2040. EGA presently exports more than 600 thousand tonnes of primary aluminium to Europe annually, serving as a crucial supplier to various sectors like automotive and construction.

In the previous year, EGA announced the commencement of construction for the largest aluminium recycling plant in the UAE, located in Al Taweelah. This state-of-the-art facility boasts a production capacity of 170 thousand tonnes annually. It is poised to cater to both local and global markets with its low-carbon metal supply, branded as RevivAL.

EGA has made significant strides in sustainable aluminium production, pioneering commercial solar-powered aluminium production since 2021. In the subsequent year, EGA achieved a production milestone of 57 thousand tonnes with CelestiAL. Moreover, EGA has already integrated recycled metal into some CelestiAL production processes at its existing facilities. Notably, BMW Group is the inaugural recipient of this sustainably produced metal, marketed under CelestiAL-R.

In alignment with the UAE's Net 50 by 2050 Strategic Initiative, EGA has publicly committed to achieving net-zero greenhouse gas emissions by 2050. This commitment underscores EGA's dedication to sustainability and environmental stewardship.