Alcoa, Inc. Business Report up until FY ended Dec. 2014
Business Highlights
Recent Years Activities
-On December 1, 2014, the Company announced that it has finalized the sale of its 50.3% interest in the Mt. Holly aluminum smelter in Goose Creek, South Carolina, USA, to Century Aluminum Company for USD 67.5 million in cash. The smelter has the capacity to produce 229,000 metric tons of aluminum annually and employs 500 people. The divestiture will reduce the Company's global smelting capacity to 3.5 million metric tons per year.
-In August 2014, the Company announced that it intends to permanently close its Portovesme (Carbonia-Iglesias, Italy) primary aluminum smelter, which has been curtailed since November 2012. The closure will reduce the Company's global smelting capacity by 150,000 metric tons to 3.6 million metric tons per year. (From a press release on August 25, 2014)
-In March 2014, the Company announced it will curtail 147,000 metric tons of aluminum smelting capacity at its Sao Luis (Alumar) and Pocos de Caldas smelters in Brazil. The curtailments are expected to be complete by the end of May 2014. In 2013, the company curtailed 34,000 metric tons at Pocos and 97,000 metric tons at Sao Luis. The new curtailments will include the remaining 62,000 metric tons of capacity from the Pocos smelter, resulting in a full curtailment of its three potlines. Another 85,000 metric tons will be curtailed at Sao Luis. As a result of the smelter curtailment, the Pocos refinery will also reduce production accordingly. The mine, aluminum powder plant and casthouse at Pocos will continue normal operations, as will the refinery at Sao Luis. Other Alcoa operations in Brazil are not affected. (From a press release on March 28, 2014)
-In February 2014, the Company announced it will permanently close its Point Henry aluminum smelter and two rolling mills in Australia. The smelter and an adjacent rolling mill are located in Geelong, Victoria. The second mill and a recycling facility are located in Yennora, New South Wales. The smelter will close in August and the rolling mills by the end of 2014. Alcoa of Australia operates the smelter where approximately 500 employees work. Alcoa Inc. operates the rolling mills which employ about 480 people. The closures will reduce the Company's global smelting capacity by 190,000 metric tons and reduce the Company's can sheet capacity by 200,000 metric tons. Once the Point Henry closure is complete, the Company will have total smelting operating capacity of approximately 3,760,000 metric tons. (From a press release on February 17, 2014)
-In January 2014, the Company announced it will permanently close the remaining two potlines at its Massena East smelter in New York in the first quarter of 2014. The decision was made because the potlines are no longer competitive. One of three potlines at the facility was permanently closed in August 2013. The closure will reduce the Company's smelting capacity by 84,000 metric tons. The Massena West facility will continue to operate. (From a press release on January 15, 2014)
-In August 2013, the Company announced that it will close or curtail 164,000 metric tons of smelting capacity in the United States and Brazil as part of its smelting capacity review that was announced in May 2013. One potline representing 40,000 metric tons at the Massena East plant in New York will be permanently closed. In addition, the company has started to temporarily curtail 124,000 metric tons at its smelters in Brazil. The closures and curtailments will be complete by the end of September. To date, Alcoa has announced closures or curtailments representing 269,000 metric tons of the 460,000 metric tons placed under review in May. This includes the permanent closure of 105,000 metric tons of capacity announced earlier at the Company's Baie-Comeau smelter in Canada. In addition, the company permanently closed its Fusina, Italy smelter representing 44,000 metric tons that was not part of the May review. Once the Massena and Brazil closures and curtailments are complete, the Company will have 16%, or 646,800 metric tons, of smelting capacity idle. (From a press release on August 14, 2013)
-In June 2013, the Company announced that it intends to permanently close its Fusina (Venice, Italy) primary aluminum smelter, which has been curtailed since June 2010. The planned closure will reduce the Company's global smelting capacity of 4.2 million metric tons per year by 44,000 metric tons. The intended closure of Fusina's 44,000 metric tons is in addition to the 460,000 metric tons of operating smelting capacity that Alcoa previously announced was under review. The Alcoa Fusina rolling mill operates separately from the smelter and is not affected by this announcement. (From a press release on June 28, 2013)
-In May 2013, the Company announced that it is postponing construction of a new potline at its Baie-Comeau smelter in Quebec, Canada as part of a revised modernization plan for the smelter, but will begin preparations for the upgrade by investing USD 100 million in the smelter over the next three years and by permanently closing the plant's two Soderberg potlines. The new potline is now expected to be in service in 2019 instead of 2016. The closure of the two Soderberg potlines, which are among the highest-cost smelting capacity potlines in the Alcoa system, will be complete in August. The two lines represent 105,000 metric tons of capacity, and are part of the 460,000 metric tons of smelting capacity the Company announced was under review on May 1, 2013. (From a press release on May 16, 2013)
-In May 2013, the Company announced that it will review 460,000 metric tons of smelting capacity over the next 15 months for possible curtailment, as aluminum prices have fallen more than 33% since their peak in 2011. The possible curtailments could affect 11% of the Company's global smelting capacity. Currently, the company has 13%, or 568,000 metric tons of smelting capacity idle. (From a press release on May 1, 2013)
Joint Ventures
-In December 2014, the Company and Ma'aden, a Saudi Arabian Mining Company, announced that the alumina refinery at their joint venture aluminum complex in Saudi Arabia has successfully produced its first alumina from Saudi Arabian bauxite. Once fully operational the refinery will produce 1.8 million metric tons per year of alumina. The alumina will be transported by conveyor to the adjacent smelter to produce 740,000 metric tons per year of high quality aluminum products for customers in the Gulf region and in international markets. (From a press release on December 21, 2014)
-Tesla "Model S" launched in 2014 adopts the Company's aluminum-intensive design. Roughly 33% over steel, or more than 200 pounds (ca. 90.7Kg) is shed.
-Cadillac "ATS" launched in 2013 adopts the Company's aluminum hood.
Restructuring
-In addition to the expansion in Iowa, U.S. for the aluminum sheet production - for which long-term supply agreements have been secured - the Company is adding automotive capacity in Tennessee, U.S. which is scheduled to be complete in mid-2015; and at its joint venture rolling mill in Saudi Arabia completed by the end of 2014. The Company is investing approximately USD 670 million in the three expansions.-On December 1, 2014, the Company announced that it has finalized the sale of its 50.3% interest in the Mt. Holly aluminum smelter in Goose Creek, South Carolina, USA, to Century Aluminum Company for USD 67.5 million in cash. The smelter has the capacity to produce 229,000 metric tons of aluminum annually and employs 500 people. The divestiture will reduce the Company's global smelting capacity to 3.5 million metric tons per year.
-In August 2014, the Company announced that it intends to permanently close its Portovesme (Carbonia-Iglesias, Italy) primary aluminum smelter, which has been curtailed since November 2012. The closure will reduce the Company's global smelting capacity by 150,000 metric tons to 3.6 million metric tons per year. (From a press release on August 25, 2014)
-In March 2014, the Company announced it will curtail 147,000 metric tons of aluminum smelting capacity at its Sao Luis (Alumar) and Pocos de Caldas smelters in Brazil. The curtailments are expected to be complete by the end of May 2014. In 2013, the company curtailed 34,000 metric tons at Pocos and 97,000 metric tons at Sao Luis. The new curtailments will include the remaining 62,000 metric tons of capacity from the Pocos smelter, resulting in a full curtailment of its three potlines. Another 85,000 metric tons will be curtailed at Sao Luis. As a result of the smelter curtailment, the Pocos refinery will also reduce production accordingly. The mine, aluminum powder plant and casthouse at Pocos will continue normal operations, as will the refinery at Sao Luis. Other Alcoa operations in Brazil are not affected. (From a press release on March 28, 2014)
-In February 2014, the Company announced it will permanently close its Point Henry aluminum smelter and two rolling mills in Australia. The smelter and an adjacent rolling mill are located in Geelong, Victoria. The second mill and a recycling facility are located in Yennora, New South Wales. The smelter will close in August and the rolling mills by the end of 2014. Alcoa of Australia operates the smelter where approximately 500 employees work. Alcoa Inc. operates the rolling mills which employ about 480 people. The closures will reduce the Company's global smelting capacity by 190,000 metric tons and reduce the Company's can sheet capacity by 200,000 metric tons. Once the Point Henry closure is complete, the Company will have total smelting operating capacity of approximately 3,760,000 metric tons. (From a press release on February 17, 2014)
-In January 2014, the Company announced it will permanently close the remaining two potlines at its Massena East smelter in New York in the first quarter of 2014. The decision was made because the potlines are no longer competitive. One of three potlines at the facility was permanently closed in August 2013. The closure will reduce the Company's smelting capacity by 84,000 metric tons. The Massena West facility will continue to operate. (From a press release on January 15, 2014)
-In August 2013, the Company announced that it will close or curtail 164,000 metric tons of smelting capacity in the United States and Brazil as part of its smelting capacity review that was announced in May 2013. One potline representing 40,000 metric tons at the Massena East plant in New York will be permanently closed. In addition, the company has started to temporarily curtail 124,000 metric tons at its smelters in Brazil. The closures and curtailments will be complete by the end of September. To date, Alcoa has announced closures or curtailments representing 269,000 metric tons of the 460,000 metric tons placed under review in May. This includes the permanent closure of 105,000 metric tons of capacity announced earlier at the Company's Baie-Comeau smelter in Canada. In addition, the company permanently closed its Fusina, Italy smelter representing 44,000 metric tons that was not part of the May review. Once the Massena and Brazil closures and curtailments are complete, the Company will have 16%, or 646,800 metric tons, of smelting capacity idle. (From a press release on August 14, 2013)
-In June 2013, the Company announced that it intends to permanently close its Fusina (Venice, Italy) primary aluminum smelter, which has been curtailed since June 2010. The planned closure will reduce the Company's global smelting capacity of 4.2 million metric tons per year by 44,000 metric tons. The intended closure of Fusina's 44,000 metric tons is in addition to the 460,000 metric tons of operating smelting capacity that Alcoa previously announced was under review. The Alcoa Fusina rolling mill operates separately from the smelter and is not affected by this announcement. (From a press release on June 28, 2013)
-In May 2013, the Company announced that it is postponing construction of a new potline at its Baie-Comeau smelter in Quebec, Canada as part of a revised modernization plan for the smelter, but will begin preparations for the upgrade by investing USD 100 million in the smelter over the next three years and by permanently closing the plant's two Soderberg potlines. The new potline is now expected to be in service in 2019 instead of 2016. The closure of the two Soderberg potlines, which are among the highest-cost smelting capacity potlines in the Alcoa system, will be complete in August. The two lines represent 105,000 metric tons of capacity, and are part of the 460,000 metric tons of smelting capacity the Company announced was under review on May 1, 2013. (From a press release on May 16, 2013)
-In May 2013, the Company announced that it will review 460,000 metric tons of smelting capacity over the next 15 months for possible curtailment, as aluminum prices have fallen more than 33% since their peak in 2011. The possible curtailments could affect 11% of the Company's global smelting capacity. Currently, the company has 13%, or 568,000 metric tons of smelting capacity idle. (From a press release on May 1, 2013)
Joint Ventures
-In December 2014, the Company and Ma'aden, a Saudi Arabian Mining Company, announced that the alumina refinery at their joint venture aluminum complex in Saudi Arabia has successfully produced its first alumina from Saudi Arabian bauxite. Once fully operational the refinery will produce 1.8 million metric tons per year of alumina. The alumina will be transported by conveyor to the adjacent smelter to produce 740,000 metric tons per year of high quality aluminum products for customers in the Gulf region and in international markets. (From a press release on December 21, 2014)Contracts
-Ford "F-150" 2015 model adopts the Company's military-grade aluminum, and 700 pounds (ca. 318Kg) is shed.-Tesla "Model S" launched in 2014 adopts the Company's aluminum-intensive design. Roughly 33% over steel, or more than 200 pounds (ca. 90.7Kg) is shed.
-Cadillac "ATS" launched in 2013 adopts the Company's aluminum hood.
R&D
R&D Expenditure |
(in million USD) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Total | 218 | 192 | 197 |
Product Development
Manufacturing technology of aluminum sheet-In December 2014, the Company unveiled a new manufacturing technology, the Alcoa Micromill, to produce automotive aluminum sheet. The Micromill process dramatically changes the microstructure of the metal, allowing the production of an aluminum alloy for automotive applications that has 40% greater formability and 30% greater strength than the incumbent aluminum used today while meeting stringent automotive surface quality requirements. Additionally, automotive parts made with Micromill material will be twice as formable and at least 30% lighter than parts made from high strength steel. The Micromill alloy has formability characteristics comparable to mild steels. The Company has secured a strategic development customer, and from its pilot Micromill facility in San Antonio, Texas, USA, has also conducted successful customer trials. (From a press release on December 4, 2014)
Bonding system of aluminum
-In July 2014, the Company announced that R&D Magazine has named Alcoa 951 — an enabler for adhesive bonding of aluminum-intensive vehicles (AIVs) — an R&D 100 Award winner. The Alcoa 951 pretreatment bonding technology is up to nine times more durable than the competition. Today, the Compay's plant in Davenport, Iowa, has an automotive treatment line that applies Alcoa 951 to the aluminum sheet before it is shipped to customers. (From a press release on July 14, 2014)
Wheels for trucks
-In March 2014, the Company has rolled out the Ultra ONE, the lightest heavy-duty truck wheel. Alcoa's new 40-pound wheel is 47% lighter than steel wheels of the same size. The Ultra ONE with MagnaForce alloy can help save up to 1,400 pounds per rig, enabling fleets to carry more goods while meeting stringent federal emissions regulations. (From a press release on March 3, 2014)
-In January 2014, the Company has rolled out its most durable, easy-to-maintain commercial truck wheel. Alcoa's new surface-treated Dura-Bright EVO wheel maintains all the benefits of its predecessor, the Dura-Bright wheel with XBR technology, while taking the wheel's performance to a new level. The Dura-Bright EVO wheel is 10 times more resistant to corrosion primarily caused by road salts and weather elements. In addition, the wheel is up to three times more resistant to chemicals, including hydrofluoric acid, found in the toughest truck wash cleaning agents. The Dura-Bright EVO wheel is now commercially available in Europe. Alcoa has begun producing the wheel at its manufacturing plant in Szekesfehervar, Hungary. The wheel is expected to be available in all other markets in 2015. (From a press release on January 23, 2014)
-In October 2013, the Company unveiled its new lightweight aluminum alloy, called MagnaForce, for use in truck wheels. The new material is on average 16.5% stronger than the industry standard, Alcoa's 6061 alloy, in similar applications. The Company's scientists and engineers at the Alcoa Technical Center, a light metals R&D center located outside Pittsburgh, Pennsylvania, USA, invented the MagnaForce alloy following two years of development. The Company expects to introduce a new, wheel featuring the alloy in early 2014. (From a press release on October 20, 2013)
Technological Alliance
-In February 2014, the Company and Israel-based clean technology company, Phinergy, have entered into a joint development agreement to further develop Phinergy's electric vehicle batteries that run on air and aluminum. The companies will collaborate on new materials, processes and components to commercialize the aluminum-air battery, which can extend electric vehicle range by 1,000 miles. Phinergy's aluminum-air battery uses air and water to unleash energy stored in aluminum. According to Phinergy, just one of the 50 aluminum plates in the battery can power a car for approximately 20 miles, extending vehicle range by approximately 1,000 miles. The Company's team engaged on the project is based at the Alcoa Technical Center located outside of Pittsburgh, Pennsylvania. (From a press release on February 5, 2014)Investment Activities
Capital Expenditure |
(in million USD) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Total | 1,219 | 1,193 | 1,261 |
Investments in USA
-In January 2014, the Company announced it has completed a USD 300 million expansion at its Davenport, Iowa facility dedicated to supplying aluminum sheet products to the automotive industry. The Davenport expansion is creating 150 full-time jobs. In addition to its expansion in Iowa—for which long-term supply agreements have been secured—the Company is adding automotive capacity in Alcoa, Tennessee which is scheduled to be complete in mid-2015; and at its joint venture rolling mill in Saudi Arabia, to be complete by the end of 2014. The Company is investing approximately USD 670 million in the three expansions. (From a press release on January 14, 2014)-In August 2013, the Company announced that it has broken ground on a USD 275 million expansion of its Tennessee Operations to meet growing aluminum demand for auto production. The previously announced expansion will convert some of the plant's can sheet capacity to high-strength automotive aluminum capacity. The expansion will create an additional 200 full time jobs in Tennessee once completed by mid-2015. (From a press release on August 29, 2013)
Investments Outside USA
<Hungary>-In January 2015, the Company announced that it has opened its expanded wheels manufacturing plant in Hungary. The larger facility doubles the Company's capacity to produce its Dura-Bright EVO surface-treated wheels compared to 2014 production levels. The expansion will enable the Company to meet growing European demand for its lightweight, durable, low-maintenance aluminum truck wheels. Construction of the USD 13 million (HUF 2.8 Billion) expansion was completed on schedule and will create 35 new permanent jobs in Hungary once the facility reaches full capacity. Demonstrating its support for the project, the Hungarian Government agreed to contribute USD 4.4 million (HUF 1 billion) through its Regional Operative Program, a government-led economic development initiative. (From a press release on January 30, 2015)