CORONADO, Calif. The U.S.
economy is in recovery mode, and while customers are rightly
cautious, the issues facing the country are not new and will be
resolved, according to Noranda Aluminum Holding Corp. chief
executive officer Kip Smith.
"We have a very serious set of
issues that have been with us beforeweve had a debt
ceiling in the pastand theyre going to have to get
resolved," Smith said. "I believe it will get resolved;
its just a question of what period of time and the
mechanism, and thats what creates the uncertainty."
Integrated producers such as
Noranda can do a number of things to help weather the economic
uncertainty, such as focusing on cash, preserving liquidity and
taking care of customer relationships, he said.
Certain sectors have already
returned to their pre-downturn rates of growth, Smith
Sales to the building and
construction industry, which accounts for around one-third of
Norandas upstream sales, have improved year on year for
the first time since before the recession, he said.
On the downstream side,
Norandas biggest market is the consumer durables sector,
which accounts for about 42 percent of its flat-rolled product
sales. Aluminum demand from this market remains stable, Smith
said, with 2.9-percent growth recorded last year, 1-percent
growth forecast for this year and 3.1-percent growth expected
Containers and packaging also
are seeing stable demand, with foil consumption forecast to
grow 2.4 percent this year and 2 percent in 2014.
The electrical sector,
meanwhile, is seeing continued growth at a sustainable pace,
Smith noted, although the sectors 13.7-percent growth in
aluminum consumption last year will fall to a steadier 3.3
percent this year and 1.8 percent next year.
Transportation is the
fastest-growing market overall, with aluminum consumption
growth of 14.8 percent last year and 6.7-percent growth
expected this year and 9.5 percent next year, Smith said.
"Global aluminum demand is
expected to continue to grow as global economic growth improves
and higher standards of living and increased demand from
emerging markets continues," he said.
The Franklin, Tenn.-based
company produces 286 million pounds of extrusion billet, 160
million pounds of rod and 410 million pounds of light-gauge
sheet and foil products annually. It sells virtually all of its
products to U.S. markets, with a very small amount sold to
customers in Mexico.