$40 Million Investment Secured by Customer Demand
Alcoa (NYSE:AA) announced a $40 million investment (100 million BRL) in its Itapissuma, Brazil, rolling mill to increase production of specialty foils for aseptic and flexible packages. Demand for specialty packaging in Brazil is expected to rise seven percent annually over the next three years due to population growth and consumer preference1. The expansion was announced today at the ExpoAlumínio trade show in São Paulo. All additional capacity has been fully committed.
“Alcoa enjoys a leading market position in specialty foil in Latin America where our value-add aluminum is essential for producing highly differentiated packaging,” said Aquilino Paolucci, President of Alcoa Latin American and the Caribbean. “A growing number of consumers prefer this type of packaging because it keeps products fresher, longer and our expansion will enable Alcoa and our customers to capture that rising demand.”
Aseptic and flexible packaging made with specialty foil is the most highly differentiated type of container in packaging. Leading food and beverage companies around the world use aseptic packaging, which allows liquid food products to retain more nutrients and taste, and remain ready for consumption for up to 12 months, even if unrefrigerated. The packages - more than 175 billion of which were delivered globally in 2013 - are typically a mix of materials such as cardboard type paper, plastics and thin aluminum.
The Itapissuma packaging facility is located in the state of Pernambuco, Brazil, which is in the Recife region, and employs approximately 700 people. The expansion is expected to add approximately 50 jobs at the plant following ramp-up of production. Initial work for the expansion is underway and commissioning is expected to begin in 2016.
This investment is part of Alcoa’s ongoing portfolio transformation to build out its value-added mid- and downstream businesses to capture profitable growth. Alcoa’s other value-add businesses in Brazil meet demand for oil and gas products, building and construction systems, fasteners, aluminum truck wheels, and forgings and extrusions.
A global leader in lightweight metals engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high-performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our 60,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoa and follow us 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,” “plans,” “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 Brazilian demand growth for specialty aluminum packaging, other trend projections, and statements about Alcoa’s strategies, outlook, 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. Important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the markets served by Alcoa, including the automotive, aerospace, packaging, building and construction, oil and gas, fasteners and other markets; (d) Alcoa’s inability to successfully transform its portfolio by building out its mid and downstream businesses while lowering the cost base for its upstream business; (e) Alcoa's inability to realize expected benefits from newly constructed or expanded facilities, including facilities supplying specialty aluminum packaging capacity in Brazil, as planned and by targeted completion dates; and (f) the other risk factors discussed in Alcoa’s Form 10-K for the year ended December 31, 2013, 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.
1 Source: Abal (Brazilian Aluminum Association)