Alcoa Honors Retiring Director Joseph T. Gorman at Annual Shareholders Meeting
PITTSBURGH--The world is undergoing fundamental shifts that will shape the next 50 years -- trends that will increase demand for aluminum and products made by Alcoa, Company Chairman and CEO Klaus Kleinfeld told investors at Alcoa’s 123rd Annual Meeting of Shareholders, held today in Pittsburgh.
Kleinfeld also reported that the company’s joint venture in Saudi Arabia is on schedule, and he paid tribute to retiring director Joseph T. Gorman, a member of the Alcoa board since 1991.
Kleinfeld presented an upbeat view of an “aluminizing” world, where population growth and urbanization are driving demand for more efficient infrastructure and transportation solutions.
“The world is experiencing fundamental shifts that will shape the next 50 years,” Kleinfeld said. “We will experience changes in all aspects of life – where we live, what we consume, how we travel. These trends are driving worldwide growth and demand for aluminum.”
The result will be expanding opportunities for those who are quick to innovate, which Kleinfeld called “a major sustainable advantage” for Alcoa.
“By understanding our customers and our customers’ customers, we are constantly creating value-added solutions,” he said.
Alcoa is projecting growth in nearly all end markets in 2011, including major markets such as automotive and aerospace, as society increasingly demands more efficient cars to meet emission standards and lighter, more fuel-efficient and comfortable airplanes. “Each of these markets is growing and evolving. We will capture this growth through our innovative new applications and our unique connection to our customers,” Kleinfeld said.
Aluminizing the World
Alcoa expects a 6.5 percent compound annual growth rate in aluminum demand, or roughly a doubling in global consumption and supply by 2020 from a 2010 baseline.
“The number of applications where aluminum is the material of choice is expanding and that foreshadows staggering growth for our miracle metal. This growth, in turn, will cause growth in both bauxite and alumina,” Kleinfeld said.
In bauxite, Alcoa forecasts growth from 214 million metric tons per year (mtpy) to 400 million mtpy. In alumina, growth from 82 million mtpy to 156 million mtpy is expected, and, in aluminum, Alcoa foresees growth from 39 million mtpy to 73 million mtpy.
Solid Progress on Ma’aden Joint Venture
Kleinfeld also updated shareholders on the status of Alcoa’s joint venture project with Ma’aden, the Saudi Arabian Mining Company. The joint venture will feature the Middle East’s first fully integrated aluminum smelter and food-grade can sheet rolling mill. All major equipment has been ordered, and groundbreaking on the state-of-the-art rolling mill in Ras Az Zawr, Saudi Arabia, took place last month. First commercial production from the 740,000-mtpy smelter – which will include a potline that is an astounding one-mile long – and 380,000-mtpy rolling mill is scheduled for 2013. The bauxite mine and refinery are set to begin operations in 2014. The mine will have initial capacity of 4 million mtpy and the alumina refinery an initial capacity of 1.8 million mtpy.
Retiring Director, New Executive VP and Shareholder Votes
In other business, Kleinfeld recognized retiring director Joseph T. Gorman, Chairman and CEO of Moxahela Enterprises LLC, a venture capital firm, and former chairman of TRW, Inc., a global company serving the automotive, space and information systems markets.
“Joe is retiring after 20 years of service as an Alcoa director. Just last year, under his leadership as Chairman of the Compensation and Benefits Committee, the group undertook a comprehensive review of executive compensation to ensure compliance with good governance practices,” Kleinfeld said. “For two decades, Joe has shared with Alcoa his deep business experience, which he gained as Chairman and CEO of TRW. We have all benefited greatly from his steady counsel and commitment to Alcoa’s success.”
With the retirement of Mr. Gorman, there are now 10 members on Alcoa’s Board of Directors.
In addition, Alcoa’s Board of Directors elected Dr. Raymond J. Kilmer an executive vice president of Alcoa. He was recently named Chief Technology Officer, succeeding Dr. Mohammad Zaidi, who will retire August 1, 2011.
The following preliminary voting results were announced at the meeting: Kleinfeld, James W. Owens, retired Chairman and CEO of Caterpillar Inc., and Ratan N. Tata, Chairman Tata Sons Ltd., the holding company of the Tata Group, were elected for new three-year terms expiring in 2014. Shareholders approved an advisory vote on executive compensation and supported an annual advisory vote on executive compensation. An annual cash incentive compensation plan was approved and retention of PricewaterhouseCoopers as the independent auditors was ratified. Elimination of the super-majority voting requirements did not receive sufficient shareholder support for approval. Advisory votes on two shareholder proposals were approved by a majority of the votes cast at the meeting. Final results will be filed on a Form 8-K within four business days of the meeting.
A copy of presentations from the annual meeting can be found at www.alcoa.com/annualmeeting. A replay of the webcast can also be accessed at this site.
Alcoa (NYSE:AA) is the world’s leading producer of primary and fabricated aluminum, as well as the world’s largest miner of bauxite and refiner of alumina. In addition to inventing the modern-day aluminum industry, Alcoa innovation has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics and industrial markets over the past 120 years. Among the solutions Alcoa markets are flat-rolled products, hard alloy extrusions, and forgings, as well as Alcoa® wheels, fastening systems, precision and investment castings, and building systems in addition to its expertise in other light metals such as titanium and nickel-based super alloys. Sustainability is an integral part of Alcoa’s operating practices and the product design and engineering it provides to customers. Alcoa has been a member of the Dow Jones Sustainability Index for nine consecutive years and approximately 75 percent of all of the aluminum ever produced since 1888 is still in active use today. Alcoa employs approximately 59,000 people in 31 countries across the world. More information can be found at www.alcoa.com.
This release contains statements that relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “expects,” “forecasts,” “foresees,” “plans,” “projects,” “should,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions, or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, forecasts concerning global demand for aluminum, aluminum end market growth, aluminum consumption rates, bauxite and alumina growth rates or other trend projections, targeted financial results or operating performance, and statements about Alcoa’s strategies, goals, targets, outlook, and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks and uncertainties and are not guarantees of future performance. Important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices for primary aluminum, alumina, and other products; (b) unfavorable changes in general business and economic conditions, in the global financial markets, or in the markets served by Alcoa, including automotive and commercial transportation, aerospace, building and construction, distribution, packaging, consumer electronics, oil and gas, defense, and industrial gas turbines; (c) the impact of changes in foreign currency exchange rates on costs and results; (d) increases in energy costs or the unavailability or interruption of energy supplies, or increases in the costs of caustic soda, carbon products, or other raw materials; (e) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of operations anticipated from its productivity improvement, cash sustainability, and other initiatives; (f) Alcoa's inability to realize expected benefits from newly constructed, expanded or acquired facilities or from international joint ventures as planned and by targeted completion dates, including the joint venture in Saudi Arabia; (g) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws and governmental policies, civil unrest, and other events beyond Alcoa’s control; (h) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; and (i) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2010 and other reports filed with the Securities and Exchange Commission. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.