International Inc. might not make a potential investment at its
Lewisport, Ky., facility if it cannot secure a better power
rate from Big Rivers Electric Corp., according to a letter from
the aluminum companys top executive to Kentucky Gov.
would be spurred by insufficient capacity in the downstream
aluminum industry to meet expected demand in North America,
according to the Oct. 10 letter signed by Aleris chairman and
chief executive officer Steven J. Demetriou and obtained by
AMM. The supply deficit is particularly acute in the
aerospace and automotive sectors, where producers are looking
to slash weight with aluminum to boost fuel economy, and as
building and construction activity rebounds.
"As a result, we have
been considering potential projects to expand our capabilities
in the United States, and specifically weve been
considering a potential investment in our Lewisport facility,"
Demetriou said. "This investment would further solidify our
strong position in our industry, and enable us to have a
strong, stable presence in the region for years to come."
The letter did not
specify the amount of the potential investment, what exactly it
might entail or a timeframe.
acknowledges Aleris interest in growth prospects in North
America, including Kentucky, a company spokesman said in an
Oct. 18 e-mail to AMM. But "theres no investment
amount to discuss at this time because no project has been
company has criticized proposed increases by Henderson,
Ky.-based Big Rivers in the past. But Big Rivers has said the
increases are necessary, in part, given Chicago-based Century
Aluminum Co.s decision to seek power on the open market
for its Kentucky smelters (
amm.com, Oct. 11)
Aleris employs 800
people at its Lewisport facility and more than 100 workers at
its Morgantown, Ky., facility, Demetriou said in the letter to
Beshear. Big Rivers "unprecedented proposed rate
increases may jeopardize the regions strong industrial
position, which is unfortunate as manufacturing is beginning to
gain strength once again in North America," he said.
"We must now consider
the possibility of other locations for our potential
investment," Demetriou said, noting that the proposed rate
increases could potentially double electricity costs at
Lewisport. "An increase of this magnitude would substantially
change the economics of our potential investment, and erode our
confidence in the future stability of electricity rates in the
region. As a result, we are beginning to explore other
The Lewisport facility
makes aluminum sheet for a variety of industries, including
building and construction, metal distribution, transportation,
automotive and specialty products, Demetriou said in the
letter. The Morgantown operation makes secondary ingot and
molten aluminum, according to Aleris website.
"Given your commitment
to sustaining a favorable business environment in Kentucky, I
want to make you aware of the potential serious consequences
that these rate increases may pose for our continued investment
in our Kentucky operations and, by extension, the community in
which we operate," Demetriou told Beshear.