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Alcoa plans $275M auto sheet expansion

Keywords: Tags  Alcoa, Klaus Kleinfeld, Tennessee, expansion, automotive aluminum, sheet, packaging, fuel economy Davenport


CHICAGO — Alcoa Inc. plans to invest $275 million over the next three years to boost aluminum sheet capacity at its rolling mill in Alcoa, Tenn., to meet increasing demand from the auto sector.

The Pittsburgh-based producer will add automotive aluminum capacity to the plant as well as convert some of its can sheet capacity to high-strength automotive aluminum production, the company said May 2.

“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 2015,” Alcoa chairman and chief executive office Klaus Kleinfeld said in a statement.

Alcoa previously announced a $300-million expansion at its operations in Davenport, Iowa, which is expected to be completed by the end of 2013, according to Alcoa. But Kleinfeld has said the expansion at Davenport is not enough to keep up with forecast demand from the automotive industry.

“Davenport is basically sold out, even though we haven’t even built the automotive (expansion),” Kleinfeld said during a quarterly conference call with analysts (amm.com, April 9).

The Tennessee expansion is expected to begin this month and be completed by mid-2015, Alcoa said. Once the expansion is finished, the plant will service both the packaging and automotive markets, the company said.

A large portion of the added automotive production is already locked down under long-term deals, Alcoa said.

The new capacity will also feature Alcoa’s proprietary Alcoa 951 pre-treatment bonding technology, the company said. Alcoa has called the technology a “breakthrough” that will allow aluminum to be used more widely on mass-produced vehicles (amm.com, April 5).

“Our technology solutions are helping to drive the continued penetration of aluminum into the automotive market,” Alcoa executive vice president and chief technology officer Ray Kilmer said in the statement. “We are enabling not just increased penetration, but (also) working with (original equipment manufacturers) to do it more cost-effectively in high-volume applications,” making expansions in automotive aluminum capacity necessary, he said.

The project is expected to create 200 permanent jobs and more than 400 jobs during construction, Alcoa said.
 
“We are grateful Alcoa is expanding its presence and joining our state’s continued growth in the automotive sector,” Tennessee Gov. Bill Haslam said in a statement.

Increased demand for aluminum in the automotive sector is supported not only buy stricter government fuel economy standards but also by cost-conscious consumers, an Alcoa spokesman told AMM.

“What’s driving this is people wanting more fuel efficiency. ... It’s being driven by $4-a-gallon gas,” he said. Automakers “get it” and are “way ahead” of even government requirements, he added.

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