$275 million investment in Tenn. to capitalize on value-added growth opportunities; will add 200 permanent and 400 construction jobs
NEW YORK--Alcoa (NYSE:AA) today announced a second major North American expansion to meet the growing demand for light, durable and recyclable aluminum sheet for automotive production.
Alcoa will invest $275 million over the next three years to expand and convert capacity at its rolling mill in Alcoa, Tenn., to support automotive producers’ plans to use more aluminum sheet to increase fuel efficiency, safety, durability and performance of cars and light trucks. Alcoa previously announced a $300 million expansion of its Davenport, Iowa plant which is set to be completed by the end of this year.
“Our Tennessee expansion is a great example of how Alcoa’s edge in technology and innovation is capturing growth opportunities in our value-added mid- and downstream businesses,” said Alcoa Chairman and CEO, Klaus Kleinfeld. “More and more auto producers are turning to aluminum to increase the fuel efficiency and quality of their vehicles – we anticipate a quadrupling of auto sheet volume by 2015 and a tenfold increase by 2025.
“It is particularly gratifying to make this investment in our namesake community this year, which is both the 100th anniversary of our Tennessee operations as well as the 125th anniversary of Alcoa,” added Kleinfeld. “We have a very dedicated and highly engaged workforce in Tennessee and a very supportive community.”
The Alcoa, Tenn., expansion will add 200 full-time, high-value jobs upon completion. In addition, more than 400 jobs will be created during the construction phase of the expansion. The project will convert some of the plant’s can sheet capacity to high-strength automotive aluminum capacity, as well as install incremental automotive capacity. The Tennessee expansion is scheduled to begin this month and be completed by mid-2015. When completed, the plant will be a key supplier to both the packaging and automotive markets. Much of the volume for the automotive expansion is already secured under long-term supply agreements.
"I want to thank Alcoa for its additional investment in East Tennessee and for 100 years of incredible service in Blount County," Tennessee Gov. Bill Haslam said. "Our Jobs4TN strategy identifies key industry clusters where Tennessee holds a unique competitive advantage, and we are grateful Alcoa is expanding its presence and joining in our state's continued growth in the automotive sector. This is another step toward Tennessee becoming the No. 1 state in the Southeast for high quality jobs, and adding these jobs is a great way to celebrate an anniversary."
The project will incorporate, through Alcoa’s supply chain, the proprietary “Alcoa 951” pre-treatment bonding technology which enables adhesive bonding of automotive structures and is facilitating more cost-effective, mass production of aluminum intensive vehicles (AIVs). The Alcoa technology has become the new pre-treatment bonding standard for aluminum sheet, extrusion and casting suppliers across the automotive industry. Alcoa is licensing the technology to the industry at the request of auto OEMs.
“Our technology solutions are helping to drive the continued penetration of aluminum into the automotive market,” said Dr. Ray Kilmer, Alcoa Executive Vice President and Chief Technology Officer. “We are enabling not just increased penetration, but we are working with OEMs to do it cost effectively in high-volume automotive applications which, in turn, necessitates our automotive expansions.”
Alcoa 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 125 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 11 consecutive years and approximately 75 percent of all of the aluminum ever produced since 1888 is still in active use today. Alcoa employs approximately 61,000 people in 30 countries across the world. For more information, visit www.alcoa.com and follow @Alcoa on Twitter at twitter.com/Alcoa and follow Alcoa on Facebook at www.facebook.com/Alcoa.
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 “anticipate,” “estimate,” “expect,” “plan,” “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 growth for aluminum, end market conditions, growth opportunities for aluminum in automotive, commercial transportation, packaging, aerospace and other applications, targeted financial results or operating performance, and statements about Alcoa’s strategies, outlook, and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, and other factors 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, and fluctuations in indexed-based and spot prices for alumina; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the markets served by Alcoa; (d) Alcoa’s inability to successfully develop and implement technologies or to realize expected benefits from its productivity, cash sustainability and other initiatives; (e) Alcoa’s inability to successfully realize the goals established in each of its four business segments, at the levels or by the dates targeted for such goals (including moving its alumina refining and aluminum smelting businesses down on the industry cost curves and increasing revenues in its Global Rolled Products and Engineered Products and Solutions segments); (f) Alcoa’s inability to complete or to realize expected benefits from its growth projects, including expansion of its North American automotive sheet capacity, as planned and by targeted completion dates; (g) the business or financial condition of key customers, suppliers, and business partners; (h) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws and governmental policies; (i) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; and (j) the other risk factors summarized in Alcoa’s Form 10-K for the year ended December 31, 2012, Form 10-Q for the quarter ended March 31, 2013, 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.