Tim Murray: Global Economy, Middle East Stronger Than Media Portrayal

Vanderbilt alumnus Tim Murray (EMBA ’03), Chief Executive Officer of Aluminum Bahrain B.S.C (Alba), brought members of his executive team to meet with Owen students, faculty and administrators as part of a recent US tour.

Murray had served in various executive roles at Alba since 2007 before becoming the CEO in October 2012.

Prior to Alba, he worked as Vice President and CFO of Knoxville-based ARC Automotive, a global manufacturer of Air Bag Systems. During his visit, Murray shared a few thoughts on the state of the global economy, as well as Alba’s future growth plans.

Q: How does the global economy look from where you sit as the CEO of an international company?

A: It’s not as bad as the media portrays it. Aluminium demand remains healthy – primary demand in North America is expected to grow on the back of automotive and construction sectors; our core market in the Middle East is booming thanks to the large spending on infrastructure projects; while in Europe consumption has softened a bit with the decline in automotive production.

Alba produces a wide range of products where two-thirds contains some value-added components — so it’s not just commodity products that we’re selling.
For us, the fundamental underlying demand is strong.

Q: Have you seen any negative business effects from the Arab Spring?

A: Just the opposite. There is a lot of infrastructure spending in Saudi Arabia and other nations in the Gulf Cooperation Council ‘GCC’ (which includes Bahrain, Kuwait, Oman, Qatar and UAE). As a result, you’re seeing sound demand in areas like construction and the automotive sector.

There has been some drop-off in Egypt’s economic activity with the uncertainty there, but that’s been pretty isolated. In many ways, the Arab Spring came and then was gone.

Q: What are some things on the horizon for Alba?

A: We are planning a $2.5 billion plant expansion with the sixth pot line which will add another 400,000 metric tons — representing a 45% increase in output on top of Alba’s current annual production of 890,000 metric tons. That will make us one of the largest single-site aluminum producers in the world with around 1.3 million metric tons. The aluminium industry in Bahrain accounts for approximately 10% of total GDP in Bahrain, compared to 35% for oil and gas and 25% for banking. This planning expansion will help these figures grow.

In my presentation to students, I explained that we will benchmark international environmental standards just by virtue of using the technology that exists today.

Q: Does your expansion mean that you anticipate future growth in demand? And does that demand as act as a kind of proxy for overall global economic activity?

A: We’re doing it partly to create domestic employment, since the government owns a majority stake in Alba. But yes, we are seeing growth in our markets. The overall aluminium industry has been growing steadily by 5-6% a year. While China and India are growing by around 7-8% per year, we expect growth to remain strong in the GCC countries in particular the Middle East.

Q: As an American, has it been a difficult transition to work in the Middle East?

A: The negative perception in the United States about the Middle East is so terribly wrong. The economies of the GCC countries, for example, are growing at 6-7% per year. The countries are very western and everyone speaks English. There is very little crime and my kids go to an international school which is far better than what we had in the US. Overall, it has been an experience of a lifetime.

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