Ali Al Baqali ‘We had to find our balance in this new reality’

By IM Staff
Published: Tuesday, 17 November 2020

Alba CEO Ali Al Baqali worked long and hard to get the qualifications and experience he needed to lead the major aluminium producer in Bahrain. Andrea Hotter discusses his path to the top with him and the company’s strategy now in challenging global markets for primary aluminium producers

Ali Al Baqali

Ali Al Baqali was fishing with his brother-in-law when he noticed a large silo structure in a terminal at a distance. He could make out a logo on the side: Alba. Although he did not know it at the time, he was staring at the alumina silo in the calciner and marine terminal for Aluminium Bahrain.

A passionate fisherman, these trips at sea were a regular occurrence for the Bahraini undergraduate, who was in his final year of study. "I asked my brother-in-law, 'Is there any possibility after I graduate from university that I can get a chance to work in a big company like Alba?’ He told me, 'I am not sure, but anything is possible.’"

Even back then, aluminium producer Alba was considered one of Bahrain’s key prestigious companies to work for, with good salaries and benefits – "If you worked at Alba, this became your company for life," Al Baqali told Metal Market Magazine. He never dreamt that one day he would become the company’s chief executive officer. 

Al Baqali was born and raised in a large family in Bahrain. As one of ten children – eight sons and two daughters – the family could not afford to send him to a private school, so he attended a government school instead. "A government school only gives you one or two classes a week in English, but at a private school all lessons were given in English except for one subject. In Bahrain, if you want to work in a business role, you have to speak good English," he said. 

With Bahrain considered a financial hub at the time, Al Baqali’s goal was to get an accounting degree. He knew that to attend university, he would need to achieve high enough grades at secondary school to earn a scholarship. But even when he was awarded a scholarship, it only covered his course and book fees.

He hesitated to ask his family to raise his daily university allowance of around $1.50. Since his father sold fish in the central market in Bahrain, the family’s income fluctuated. Al Baqali had grown up helping his father at the market during the weekends and decided to supplement his income by continuing to work there part-time during studies for his degree.

"My father was very kind with me. He gave me around $3-4 a day, which was a lot of money at that time. When I went to university, I felt like a king as I could buy from the canteen anything that I wanted, and I also saved some money," he recalled. Later on, he told his father that he wanted to earn his own money without having to rely on him. "Then he injected a small capital sum to [regularly] buy a fish of around 20-40 kg, and I sold it by myself in his shop so that I earned an income," Al Baqali explained.

It enabled the young entrepreneur to earn some pocket money, most of which he spent on learning and buying books. One of those purchases was a dictionary, which he used to study. Al Baqali had quickly concluded that his government school background meant he did not have the command of language required for university, where all classes were in English. 

"It was not easy for me. The first few weeks were very difficult, like taking me now to a class in Chinese, but this fueled me to learn English, and fast!" he laughed. "I still remember carrying my dictionary everywhere and I was translating what I didn’t know or study previously. I needed some time to understand the true meaning of some words. It wasn’t easy but gradually I picked up the language and managed to graduate with a good degree."
Although he laughs when he looks back at that period, Al Baqali admitted that those times were hard. "It sounds fun now, but if it was not that hard, I would not have been where I am today. The difficult situation provided me with the incentive and mindset to work on myself to get where I am today," he added.

Early career
After graduating, Al Baqali applied to work at Alba and the large banks that populated Bahrain’s financial sector. "Unfortunately, my first letter from Alba said I was not successful for selection. I asked why, and they said they were looking for professional people with experience, not freshly graduated people," he told Metal Market Magazine. 

Setting his sights on one day joining Alba, Al Baqali was still keen to understand what exactly the company was looking for. He had a contact in the company’s human resources department and asked why he had not been given the role. The advice was to get a professional qualification in a specialized field.

Al Baqali took this as a challenge to improve his skills and gain experience elsewhere before trying again. "I believe this gave me the drive to differentiate myself to be selected again in Alba," he added. He got a job as an accounting clerk in a family-run company, with few processes and systems and a difficult manager who seemed anxious that Al Baqali would do well. But he also finished work at 2pm daily, allowing him to study part-time for the accounting qualifications he was determined to achieve. 

"After a year, I was helped to move jobs by my colleague – he came with a newspaper and told me there was an opportunity with another company as a purchasing clerk! He was already fearful I would take his place, so he supported my move to the new company. And I thank him for this," Al Baqali smiled. 

The new role was at a major iron ore and steel company, Gulf Industrial Investment Company (GIIC), located in Bahrain with major shareholders based in Kuwait. "I was young and wanted to change my career because I knew I wouldn’t get anywhere if I stayed in the family company," he added.

Al Baqali became a purchasing clerk at GIIC. His new manager was very supportive, sponsoring his enrollment in training towards the internationally recognized certificate of the Chartered Institute of Purchasing and Supply (CIPS), after just three months at the firm. 

He was half-way through the four-stage certificate when he spotted a large newspaper advert for a purchasing supervisor at an unnamed company. Assuming it would be at a large firm because of the size of the advert, he applied, heard nothing back, and forgot about it. Four months later, he was called for an interview with a small poultry company. 

"The company said I had applied, and they had my CV. I said, 'Never would I try to change my job from a steel to poultry company, no way!’ But the man on the phone swore he had my CV and application form and said they hadn’t put the company name on the advert because it might not attract people," Al Baqali said.

He eventually agreed, albeit reluctantly, to go to an interview with the poultry general manager and was offered the job on the spot. But Al Baqali had a condition: to sponsor him for the remaining two stages of the CIPS qualification, and then he would join.

It was, Al Baqali acknowledged, a risk to move from a large company like GIIC to a small firm like the poultry company, mostly because the ability to move back to a bigger firm again can be hard. But he took the chance. 

On his first day at the poultry company, Al Baqali asked for a run-down of the standard operating procedures (SOPs), who would give him a handover, and who the team was. "The manager opened his drawer, gave me a key, said it was for my office, and told me to go and work. I said, 'No, what are the SOPs, your system?’ He said, 'We don’t have a system. A man with your qualifications and knowledge that has worked in purchasing at a large company, you create a system for us!’" Al Baqali said. 

It was a challenging task: everything was written by hand or on a typewriter, with no standard system. So Al Baqali created one. Over the next three and a half years, Al Baqali completed the rest of his CIPS qualifications. It was 1998, and he was thrilled. The same cannot be said for his boss, who dismissed the certificates saying they would add "no value" to Al Baqali. "It was a shock for me. Then I realized that it was the time for me to move," he added. 

Although he was qualified, Al Baqali did not have what he called wasta, an Arabic word that means connections or clout. Fortunately, a colleague and friend at the poultry company pointed out that Alba was advertising in the newspaper for employees for its planned Line 5 smelter expansion. 

Alba’s main requirement? The CIPS qualifications that Al Baqali had achieved that same year. 

His Majesty King Hamad Bin Isa Al Khalifa

Progression at Alba
In 1998, Al Baqali started as a purchasing officer at Alba, which produced just over 500,000 tonnes of aluminium from its four potlines that year. Aside from his manager, Al Baqali was the only one in his role with CIPS qualifications at the time. Within three years, an opportunity presented itself to the ambitious Al Baqali. It was the chance to be a section head in the warehousing department, which was also headed as a dual-role by his existing purchasing manager. 

"My view was that if I stayed in the purchasing department, it would take me many years to progress my career because, despite my CIPS qualification, there were many people there with longer lengths of service. By contrast in the warehouse, there were two heads of section nearing retirement," he recalled. 

Warehousing at that time was not seen in the best light – "If someone made a mistake or needed to be disciplined, they were sent to the warehouse to work!" he said.

But Al Baqali "looked at it from a different angle" and decided that in warehousing, he would have access to all operations at Alba, and meet people across the spectrum of the company as they came to him with daily materials requests. "Many of my close friends asked me if I was crazy, saying I would leave my tie and work in a supervisor’s uniform overseeing 70 people instead of managing materials," he said.

Once again, he took the challenge, with the goal of being patient, capturing new skills, and proving himself until the time came for a promotion. The youngest head of section, Al Baqali worked in the warehouse for almost three years, which was, he said, the plan. 

He gained a lot of knowledge in the role, and was exposed to company-wide personnel, including top management. 

Then the global financial crisis hit, which slashed demand in key consuming industries, including construction, automotive and housing. Like its peers in the metals and mining industry, Alba went through a major restructuring in 2009, bringing in consultancy firm McKinsey & Company to help. 

As a result of the restructuring, many senior managers and general managers left, and Alba identified potential leaders for the future. Al Baqali was one of them. "I was put on a programme to be a successor for the supply chain officer. I was promoted to purchasing manager in 2010. Within two years, I was acting chief financial officer and acting chief supply chain officer," he said.

The finance side was not his forte. Al Baqali had deep experience with supply chains, but felt he needed support to bring himself up to scratch to eventually take over the role of CFO. "Just before my first board meeting as acting CFO, Alba’s then CEO Tim Murray called and said, 'Remember, you won’t get a second chance to impress people.’ It was good advice! He told me to prepare, prepare and prepare. So, I did," he said. 

"I spent a lot of time working on the slides, and even did a dry run in front of my wife, who didn’t understand what I was saying because it was all numbers; her eyes were glazing over, but it was good practice for me," he laughed. 

The hard work and preparation paid off. At the next board meeting in 2013, Al Baqali was named CFO.

The role was vast, covering finance, supply chains, legal, operational excellence and IT. "I had great support from my teams, but I worked very hard to improve myself and to prove to everybody, including Tim, that I was a good supporter for him. I remember leaving the office at night when nobody would be on the executive floor," Al Baqali said.

Al Baqali and Murray had been working together for almost seven years before a power outage shut Line 5 for more than four hours in April 2017. The company subsequently restored power, but it took four months for Line 5 to return to being fully operational. Al Baqali was a key support to Murray, heading the resilience team and acting as CEO on site when Murray traveled. 

When Murray later notified the board of his intention to leave, a succession plan was created. Al Baqali was appointed deputy CEO and chief supply chain officer in late 2017. When Murray left in July 2019, Al Baqali became acting CEO. 

The company was losing money and, even though it had demonstrated good results, its approach to safety needed updating. Al Baqali’s goal was to prove he could return the company to profitability and improve and sustain its safety performance. "It was a big challenge, but with the support of the team – one man cannot do everything by himself, I have a good team and supportive executives – we managed to turn the company in 2019 to be profitable," Al Baqali said. 

"Although it was a small profit, the board was happy because everyone had expected 2019 to be a loss-making year for Alba, particularly with Line 6 opening. We managed to close the year with a profit, and to reach 10 million safe working hours with no accidents by December," he said.

Alba entered 2020 with good momentum, financially and in safety; Al Baqali was announced as CEO in February. 


Bahrain & Alba
Having discovered oil in 1932, the government of Bahrain sought diversification into other industries like manufacturing and finance. By 1968, it was already planning an aluminium smelter powered by the country’s natural gas. 

Today, the aluminium sector accounts for around 12% of the country’s gross domestic product and employs roughly 10,000 people, almost a third of whom work at Alba. "Bahrain is a small island and securing jobs is very important – aluminium recruited many people. The initial vision was to diversify from oil and add jobs for Bahrainis, and then build a proper downstream industry in Bahrain," Al Baqali said.

The strategy has been to grow organically. Every decade, Alba has embarked on expansion projects with more efficient technology. Its first two potlines were in 1971, marking the first non-oil industry in Bahrain, with Line 3 added in 1981, Line 4 in 1992, Line 5 in 2005 and Line 6 added last year.

From a 120,000 tonnes per year smelter at inception, Alba has grown to become one of the world’s largest aluminium smelters, with an annual production capacity this year of more than 1.5 million tonnes. The latest expansion – which was completed ahead of schedule and below budget – created the world’s longest potline at around 1.5 km, hosting 424 pots. The company has already successfully refinanced the project’s $1.5 billion syndicated loan facility.

As Alba grew, so too did Bahrain’s downstream industry, with the creation of Bahrain Atomisers International and Balexco in 1972, Midal Cables in 1977, Balco in 1978, Garmco in 1981 and AluWheel in 1992. 

"During the 2008-2009 crisis, when there was no external demand for Value-Added Products (VAPs), the downstream sector took metal from us – Alba always had a customer. That was also a benefit for us," Al Baqali recalled. The government is now planning to further expand the downstream aluminium sector, especially now Line 6 is on stream. 

Meanwhile, other countries in the Cooperation Council for the Arab States of the Gulf (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – sought to replicate Bahrain’s success by setting up aluminium smelters and/or developing a downstream sector. "The rise of the aluminium industry in the GCC did more than just diversify the economies of these countries. It changed the way of life for the people by first opening other sectors and, second, by providing job opportunities for locals," Al Baqali said.

"GCC smelters are close-knit and we have always stood by each other. There have been significant collaborations between the smelters either to support or share knowledge," he added. But even more intra-regional cooperation is needed in the GCC going forward, he noted. "Unfortunately, we are all competing with each other. There’s no harm in having your own smelter, but we have to work together. Our objective is to align with the GCC smelters, especially on the upstream side," he said. 

"We’re working with a few of our neighbors to have a joint venture in alumina or any future opportunities – we’re keen to participate and work with them. This is maybe the first step towards more of an alignment in the region," he added. Before line 6, Alba procured around two million tonnes of alumina per year; now that figure is three million tonnes. 

"To sustain the plant, mitigate risk and secure supply, we need to have at least one million tonnes of alumina through a JV or equity stake, or at least a long-term offtake agreement," Al Baqali said. "Our preference is to have a venture with the neighboring GCC smelters, but we are open to looking at non-GCC international partners – we are open for any opportunities." 

The issue of green aluminium, as low-carbon production of the metal is known, is a "hot topic" at meetings of the Gulf Aluminium Council, a coordinating body that represents the interests of the industry within the Gulf, Al Baqali said. 

"We support the green aluminium initiative, but we must also be rational. Let’s be frank – we’re in the Middle East, and no matter what we do, we won’t be able to rely on hydropower like other producers," Al Baqali told Metal Market Magazine. 

"Our area is rich with gas, but even then, we definitely won’t reach the four tonnes of carbon dioxide per tonne of aluminium produced target that has become the unofficial definition of low-carbon aluminium. We have to be practical – okay, there’s an initiative that we should support the environment, but it should not favor some over others," he said. 

According to Al Baqali, carbon emissions are a universal problem, regardless of where they come from. "The aluminium industry as a whole contributes 4% of global carbon dioxide – we shouldn’t penalize or avoid smelters that use gas or coal to generate power to produce aluminium, and listen only to the producers who use hydropower, a method that has its own problems also," he added. 

Acknowledging that in the future, customers will demand sustainable aluminium, Al Baqali noted Alba already has many initiatives on this front, including the use of solar energy, recycling scrap aluminium, and to have the most efficient power station in the Middle East. Alba is also building the first spent pot lining treatment plant in the GCC, a zero-waste process to treat up to 35,000 tpy and then convert it to a valuable product. 

Over the past 15 years, the company has also transformed its site from desert to oasis, adding lakes and waterways, a vegetable garden and a fish farm. "This should also have a value. Alba has invested more than $1 billion for this, and we shouldn’t be penalized because we’re using gas, with a possible tax on carbon. It should be a global initiative with everybody contributing to sustainability," he said. 

"We are aligned in the GCC with achieving the target of zero carbon emissions by 2050, but we shouldn’t take advantage or create a product that serves one group’s interests against the rest of the world. We need to work together to suggest a path if a smelter cannot reduce its emissions to four tonnes – we shouldn’t just omit them from the equation or penalize them by forcing them to achieve a lower premium," he added. 

European tariffs
For years, GCC smelters have been subject to duties ranging between 4% and 6% on imports of aluminium into Europe. It is a core challenge for the region, and hinders smelters there from competing fairly, Al Baqali said. "In my humble opinion, the imposition of duties or tariffs can’t be considered a long-term solution as it will not ensure fair competition to producers in the global economy. Every smelter has their challenges, the most common one being taking pro-active measures to remain competitive," he noted. 

Section 232 tariffs on imports of aluminium into the United States have sparked condemnation from the majority of the North American aluminium industry. Although Bahrain remains Alba’s largest market, the company has around 10% of its clients in the United States. "There is talk that the United States will remove Section 232 tariffs against Bahrain (with or without quota conditions) and the UAE because the two countries signed a peace agreement with Israel – if this happens, it will be good news for Alba. It will give us a fair chance to compete in the United States and increase our market share," he told Metal Market Magazine. 

"Right now, we are not losing because tariffs are reflected in the negotiated premiums, but if this continues for a long time, we are going to lose market share because US-based customers will look to pay lower premiums elsewhere," he said. Al Baqali said the GCC smelters "would all love to see tariffs eliminated and we didn’t see why they were necessary in the first place."

"GCC producers are not dumping metal in Europe or the United States. Our products sold there are VAPs which are in shortage," he added. 

Alba having closed the first quarter in profit, the global Covid-19 pandemic hit. The company adopted initiatives in line with the guidelines of the Bahrain National Team to Combat Covid-19, including ongoing sanitization measures, social distancing, protective kits, remote working and regular communication with employees. 

"Like everyone else, we had to find our balance in this new reality and that meant to keep focused on what we, as a company, can control best in terms of safety, continuous and efficient operations, and cost-cutting," Al Baqali said. "Covid-19 has taught us that changes can be drastic and sudden – of course we had to move fast all the while keeping the morale of our workforce high," he added. 

Although demand in key aluminium end-use industries was impacted by the pandemic, Alba is currently approaching its customers for the 2021 mating season, and Al Baqali said the company’s marketing team had given him "good news" to date. "The market has recovered slightly – demand is picking up, especially for VAPs and particularly in the auto sector," he said, although he noted that high levels of aluminium inventories persist in LME warehouses. "Demand for VAPs is there and we are truly hopeful to book most of our production for 2021," he added.

Alba currently exports around 75% of its sales, with around 24% of sales to each of Asia and Europe, 17% to other Middle East North Africa (MENA) region countries, and the rest to the Americas. Part of Alba’s marketing roadmap to 2022 is to qualify its VAPs in the market, mainly the slabs segment. This has been made possible by the increased casthouse capacity along with new certifications, namely from the Aluminium Stewardship Initiative and Ecovadis.

"We have a good footprint for billets and foundries, but with Line 6’s 540,000 tonnes per year capacity casthouse, we will be able to produce different sizes of slabs," Al Baqali said. 

Family, fishing and advice
Al Baqali has an MBA from a programme hosted in a venture between the French-Arabian Business School (FABS) and the ESSEC Business School. It was challenging. Not having studied for some years, Al Baqali was also the father of five children, and recognized he was burdening his wife with the children’s care while he studied. 

It took Al Baqali 18 months to complete his MBA. "I remember when I graduated and told my wife I had finished, she cried and said, 'Now you will be free to spend time with us at the weekends!’ But then I got the opportunity to act as an executive and spent my weekends still working!" he said.

Al Baqali has triplet daughters aged 19, studying accounting, medicine and history, respectively, at university. He also has a 17-year old daughter and a 12-year old son. "My children came at different stages of my life and I realize that whenever I got or was about to receive a promotion, I was blessed with a child," he said.

Al Baqali had many influencers in his career, namely Alba chairman Shaikh Daij bin Salman bin Daij Al Khalifa and former CEO Murray. 

Al Baqali’s mother has also been a major influence on him through his life – among many things, he learnt patience from her – and she remains a mentor today. While patience is perhaps the key to his fishing prowess – "Maybe in ten years’ time, I will already be retired and fishing in one of the rivers that produces hydropower for smelting!" – Al Baqari prefers to be at home.

"I like fishing. But really, I am a home person. I spend all my spare time with my wife and children because I only have a few hours with them each day. Once I finish work, late, I go home, I sit with the family, and we often go out to eat dinner in a restaurant," he said, adding that the family eats at home currently due to the Covid-19 pandemic. 

Any other spare time is spent reading the news online to keep up to speed with what happens in the world. "I prefer to read online rather than with a physical paper. If I take a book or paper, within 15 minutes I fall asleep!" he laughed. 

What advice would he give young people joining Alba today? "You can’t have an opportunity in one day – you have to be patient, work hard, and not listen to other people who are discouraging you about your future prospects," he said. 

It’s important to accept every task, even if it doesn’t seem relevant; it enhances a person’s skills and capabilities, Al Baqali advised. "I often think back to how my dream became reality, to work at Alba, but I put a lot of time and effort into getting here. I never thought when I joined, that I would one day become the CEO of Alba," he said. "So, my advice to young generations is, be patient and invest in yourself. If you believe you can do it, nothing will be impossible when you know what you want."