Alcoa Expanding Aluminum Lithium Capabilities to Meet Growing Aerospace Demand for Its Industry-Leading Alloys

January 25, 2012

Includes Expansions in Pennsylvania, United
Kingdom and A New State-of-the-Art Facility in Lafayette, Indiana

NEW YORK–Alcoa (NYSE:AA) today announced it is expanding its aluminum lithium
capacity and capabilities at three locations around the world to meet
growing demand in the aerospace market for its newest alloys. The
alloys, introduced last year and now patented, allow airframers to build
dramatically lighter and lower-cost airplanes vs. composite alternatives.

The new alloys provide the best strength-to-weight performance in
Alcoa’s aerospace alloy portfolio combined with better stiffness and
corrosion resistance. The alloys are used in extrusions, forgings, sheet
and plate applications across aircraft structures, including airplane
wings and fuselage elements. The expansions follow discussions with
airframers subsequent to the launch of the alloys last year.

“The demand we are seeing for aluminum lithium is an excellent example
of the Alcoa Technical Advantage in action and is the result of our
continued leadership in aerospace alloy development across our Alcoa
aerospace businesses,” said Eric Roegner, President of Alcoa Forged and
Extruded Products. “When completed, our aluminum lithium supply chain
will be the premier operation in the world, capable of making the widest
breadth of products in the most efficient manner – there will be nothing
like it anywhere.”

The largest of the aluminum lithium capacity expansions is a greenfield
state-of-the-art facility to be constructed adjacent to Alcoa’s
Lafayette, Indiana plant. When completed the facility will produce more
than 20,000 metric tons of aluminum lithium and be capable of casting
round and rectangular ingot for rolled, extruded and forged
applications. Alcoa plans to invest more than $90 million in this
facility alone which will encompass approximately 115,000 square feet
and create approximately 75 permanent high-value jobs, as well as
approximately 150 additional jobs during the course of construction.
Initial work on the new Lafayette facility has already begun and is
expected to produce its first aluminum lithium by the end of 2014.

“In addition to producing a wide range of billet sizes up to 33-inches
in diameter, we will also be able to produce slab capable of producing
wing skin plate and fuselage sheet for any current or planned commercial
air program,” said Roegner. “Our process, thermal and filtration systems
all will be state-of-the-art.”

An economic development incentive package from the Indiana Economic
Development Corporation (IEDC) and Greater Lafayette Commerce helped
secure the selection of Lafayette for the expansion. The incentive
package includes tax and financing credits as well as training grants
for the Lafayette workforce and new employees. In addition, Alcoa and
the United Steelworkers worked together to modify existing work rules to
ensure the operational effectiveness of the new facility.

“Alcoa’s expansion strengthens Indiana’s reputation of manufacturing
excellence,” said Governor Mitch Daniels. “We are grateful that this
global manufacturing leader continues to find the Hoosier State the most
advantageous state for growth.”

Alcoa is also expanding production at two other locations as a result of
customer demand:

  • Alcoa’s Technology Center in Alcoa Center, PA near Upper Burrell, PA
    where aluminum lithium capacity is being expanded 30 percent; and
  • Alcoa’s Kitts Green plant in the United Kingdom where upgrades are
    underway that will create additional casting capacity.

In June of last year, Alcoa launched a series of new technologies that
allow airframers to build dramatically lighter and lower-cost
short-range airplanes at significantly lower production risk than
composite-intensive planes. The new technologies:

  • lower the weight of the plane by up to 10% vs. composite-intensive
  • lower the cost to manufacture, operate and repair planes by up to 30%
    vs. composite-intensive planes, and at significantly lower production
  • allow for a 12% increase in fuel efficiency, on top of the 15% from
    new engines; and
  • deliver passenger comfort features equivalent to composite-intensive
    planes, such as higher cabin pressure, large windows and higher

“We have received great feedback from the market on our new solutions,”
said Mark Vrablec, President of Alcoa Aerospace, Transportation and
Industrial Products. “The tide has certainly changed in the world of
aerospace structural materials and that is a result of our technologists
continuing their work to keep Alcoa at the forefront – more than 90
percent of all the alloys used in the aerospace market today were
developed by Alcoa,” added Vrablec.

About Alcoa Aerospace

Alcoa Aerospace is comprised of 4 businesses with operations across the
world totaling approximately $3 billion in revenues and #1 share
positions in their markets: Alcoa Global Rolled Products and Alcoa
Forgings and Extrusions serving the structures market; and Alcoa
Fastening Systems and Alcoa Power and Propulsion. Alcoa’s aerospace
solutions run from nose to tail and from wing-tip to wing-tip. Alcoa has
been at the forefront of every major milestone in aerospace history
based on its commitment to continually innovate and a “beyond materials”
philosophy – where materials, structures, and designs work in concert to
provide optimal solutions for customers.

About Alcoa

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 120 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 10 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 31
countries across the world. More information can be found at