Company Aluminum Lithium Revenue Projected to Quadruple by 2019
Alcoa (NYSE:AA) today announced it has completed the expansion of aluminum lithium capacity at its Kitts Green facility in the United Kingdom to serve the growing demand for the Company’s 3rd generation aluminum lithium alloys. Alcoa projects its aluminum lithium revenues will quadruple over the next six years to nearly $200 million.
The Kitts Green expansion was the second phase of the three-part expansion program by the Company to satisfy customer demand for advanced aerospace products and patented alloys, which allow airframers to build more fuel efficient and lower-cost airplanes vs. composite alternatives. The completion of the Kitts Green expansion was announced at the Paris Air Show.
Alcoa upgraded and expanded casting capacity at the Kitts Green plant and also expanded capacity at its Technology Center in Alcoa Center, PA by 30 percent. The third phase of the expansion is a new $90 million facility under construction adjacent to the Company’s Lafayette, Indiana plant that will provide an additional 20,000 metric tons of aluminum lithium. The new facility will supply round and rectangular ingot for rolled, extruded and forged applications, in sizes compatible with the largest aluminum aerospace components in service today. The Lafayette expansion is scheduled to be completed and online by the end of 2014.
Alcoa’s new aluminum lithium alloys provide the best strength-to-weight performance in Alcoa’s aerospace alloy portfolio combined with better stiffness, damage tolerance, and corrosion resistance. The alloys are used in extrusions, forgings, sheet and plate applications across aircraft structures, including airplane wings and fuselage components. The expansions follow discussions with airframers subsequent to the launch of the alloys.
“We introduced our third-generation aluminum lithium alloys at the last Paris Air Show and demonstrated their potential to increase fuel efficiency, reduce inspection intervals, improve passenger comfort and lower capital costs for aerospace manufacturers,” said Mark Vrablec, President of Alcoa Aerospace, Transportation and Industrial Rolled Products. “The response was phenomenal. In fact, the response indicated demand that exceeded our production capacity at the time, so we launched initiatives to expand our aluminum lithium operations at three locations around the world. The initiative also provided us with the opportunity to increase our aerospace recycling capability for customers to benchmark status in the industry,” Vrablec added.
About Alcoa Aerospace
Alcoa Aerospace is comprised of 4 businesses with operations across the world totaling approximately $3.8 Billion in value-added revenue 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.
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 125 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 11 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 30 countries across the world. For more information, visit www.alcoa.com and follow @Alcoa on Twitter at twitter.com/Alcoa and follow Alcoa on Facebook at www.facebook.com/Alcoa.
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “estimates,” “expects,” “projects,” “should,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions, or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, forecasts concerning demand for aluminum lithium alloys and advanced aerospace products, projections of revenues or other financial results, operating performance or trends, and statements about Alcoa’s strategies, objectives, outlook, targets and business and financial prospects. Forward-looking statements are subject to a number of known and unknown risks, uncertainties, and other factors and are not guarantees of future performance. Actual results, performance, or outcomes may differ materially from those expressed in or implied by those forward-looking statements. Some of the important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions; (b) unfavorable changes in general business and economic conditions, in the global financial markets, or in the markets served by Alcoa, including aerospace, automotive and commercial transportation, building and construction, distribution, packaging, defense, and industrial gas turbines; (c) the impact of changes in foreign currency exchange rates on costs and results; (d) increases in the costs of energy or other raw materials or the unavailability or interruption of energy supplies; (e) Alcoa’s inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated from its restructuring programs and productivity improvement, cash sustainability, technology, and other initiatives; (f) Alcoa's inability to realize expected benefits from newly constructed or expanded facilities, including facilities supplying aluminum lithium capacity, as planned and by targeted completion dates; (g) changes in competitive conditions, including actions by competitors and developments in technology and products, including risks relating to customer acceptance of aluminum or patented alloys in substitution for competing materials; (h) political, economic, and regulatory risks in the countries in which Alcoa operates or sells products, including unfavorable changes in laws and governmental policies, civil unrest, or other events beyond Alcoa’s control; (i) failure to maintain investment grade credit ratings; (j) the outcome of contingencies, including legal proceedings, government investigations, and environmental remediation; (k) the business or financial condition of key customers, suppliers, and business partners; (l) the impact of cyber attacks and potential information technology or data security breaches; and (m) the other risk factors summarized in Alcoa’s Form 10-K for the year ended December 31, 2012, and other reports filed with the Securities and Exchange Commission. Alcoa disclaims any obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.
Kelly Pasterick, 212-836-2674
Kevin G. Lowery, 412-553-1424
Monica Orbe, 212-836-2632 (NY)