FORGING A TEAM OF CHAMPIONS
In his first media interview, Bruce Hall, CEO of Sohar Aluminium, talks to Jessica Brookes about his plans for the aluminium major

What is your leadership mantra?
I think first of all we need to have a clear vision for the organisation that appeals to all stakeholders, and when I say that I mostly think about the employees. The business here is about the employment opportunity for over 1,000 people. We have to start with a vision that allows people to feel part of that – they need to see that their individual efforts, irrespective of what role they play in the organisation contribute to the vision of the company.

The second thing is that people need to have a sense of ownership of the role that they play and the work they do and how this contributes to the business. Accountability is very important for people, and the extension of that is single-point accountability, so it is absolutely clear who is responsible for what.

What challenges have you faced so far?
On a personal level the biggest challenge I have got is to find where I can be most effective. I was pleasantly surprised to find that the quality of people that have been working on Phase I here is very good. The team here is superior in its entirety compared to anything I have seen in other smelters. So, as an individual, the challenge is to add value to such a team.

On a more general basis, I think our superior team is not functioning well as a team. I think the challenge that we all face is how to turn ourselves from a team of champions into a champion team.

When it comes to technical issues, the plant hasn’t performed to the level (during the start-up) that one would have expected from such a team. This is unfortunate, especially since the people have worked so hard to make it a success. The main technical challenge is to complete the start-up, which we are aiming to achieve by the end of March. If we can do that I think a lot of people will feel that they have achieved a great milestone. It is a very important psychological milestone in a plant’s life.

What impact has the global financial crisis had on Sohar Aluminium and the industry at large?
The direct impact for Sohar Aluminium is fairly low. By its nature a new smelter is always going to be a low cost smelter, you can assume that because no one would build a smelter in the first place if it is not going to be cost effective. We are well positioned in terms of the operating costs compared to other older, more mature smelters, which are suffering on account of the current price of aluminium. But for us it is business as usual. If there is any impact at all it may be on the timing of our Phase II expansion, however it is probably a good time to think of building as the cost of construction has dropped dramatically.

As for the industry in general it is quite a different story. I believe a number of smelters are running at ‘no-profit’. The cost of production for a lot of these operations would be at least as high as the revenue coming from their metal production, if not higher. I think that we are going to see continual closure of capacity. There has already been quite a big closure of capacity in China, which is by far the highest cost producer. With the reduction of consumption of aluminium in China I am sure there is going to be a measured reduction in operating capacity and I think that the jobs of a lot of people are going to be effected.

Rio Tinto Alcan, which own a 20 per cent share of the smelter, has announced they will be cutting 14,000 jobs. Will Sohar Aluminium be impacted?
We may be indirectly impacted because we have a reasonable number of Rio Tinto Alcan employees working here. Some of those are on short-term contracts with us and are due to go back to other projects that Rio Tinto Alcan have in the pipeline. If these job cuts that have been announced are one element of their cost containment, one might presume they are also going to go slow with their capital investments. People may be worried where they will go in the organisation if the projects they were planned to go to are not going to advance as quickly. However, the people we have working here are the cream of Rio’s people. One wouldn’t imagine that the cream of expertise in the aluminium industry would be the ones that would be asked to go. We might find that some of the older smelters, some of the high cost smelters and even some of the smaller Canadian ones might reduce their capacity or go into a closure mode, and therefore the people who are working in those smelters are likely to be part of the 14,000. The other point is that it is yet to be seen that Rio is going to cut these jobs out of the aluminium sector. What I have heard to date is that their biggest exposure is in the mining area.

Are you planning to go ahead with the Phase II potline?
We are not looking at that at all at the present moment. At the last board meeting the subject was raised as it inevitably is, and I would imagine shareholders are considering their options in regard to Phase II. As I said earlier, now it is a good time to build, even though it might not seem that way. Based on what I have seen in the eight weeks that I have been in Sohar and on the cost of construction in Phase I, Phase II of this project is an attractive proposition compared to other smelter developments elsewhere.

What are your plans for the year ahead?
There is a lot of work that has to be done to try and improve the stability of the plant and our technical performance. However, the main focus for me in the next 12 to 18 months will be on training. We are not going to pursue Omanisation just for the joy of it. It has to be done in a controlled and structured fashion. I think it is important for the region’s development to be able to demonstrate that Omanis have the capabilities of acquiring technical knowledge and the operational skills that allow them to be able to run this plant. It is pretty clear that we have not done enough training. We have underestimated the time resources and the human resources that were required to get adequate training. Once we get past the psychological barrier of a start-up, then we can get back to more concentrated and focused training in specific areas. After this, we can start the development phase of staff promotions.

This week we are going to start on our business plan review process which I am hoping will result in a five-year business plan with a strategic plan for achieving the targets. One of the things I am going to be advocating is that a primary function of Sohar Aluminium is to help the people who live in the region to develop, to have a better quality of life, and to give greater opportunities to their kids for education and employment in the future. I think that Sohar Aluminium has a huge opportunity to contribute to the future development of this region and to be the benchmark for bringing new businesses and industries to the region.

Top^