Alcoa Expands in Indiana to Capture Growing Aerospace Demand for Advanced Jet Engine Parts

May 29, 2014

Capacity Broadens Reach into Large Commercial Jet Engine Market

  • New, $100 million facility to produce nickel-based structural components for industry’s best-selling jet engines
  • State-of-the-art plant to use latest in advanced manufacturing technologies including digital x-ray, 3D printing and robotics
  • Expansion to create 329 new jobs by 2019
  • Investment supported by customer contracts

Leading aerospace manufacturer Alcoa (NYSE: AA) today broke ground on
its state-of-the-art, $100 million aerospace expansion in La Porte,
Indiana where it will produce nickel-based superalloy jet engine parts.
The new 320,000-square-foot facility will expand Alcoa’s reach from
structural engine components for business and regional jets to large
commercial aircraft, including narrow- and wide-body and military
airplanes. Engines for narrow-body aircraft are among the top selling
jet engines in the world.

“Aerospace growth is soaring and Alcoa is ramping up our downstream
capabilities to capture that demand,” said Alcoa Chairman and CEO Klaus
Kleinfeld. “Applying our industry-leading expertise, this facility will
deliver highly engineered parts our customers need to build some of the
best selling engines and at high volumes.”

The plant will increase the Company’s capacity to supply engines for
narrow-body aircraft. It also will enable Alcoa to produce parts nearly
60 percent larger than components it makes today, expanding its market
reach to wide-body airplanes. These components are used in the
compression and hot sections of the engine. Alcoa is already the global
leader in jet engine airfoils.

Construction of the plant is underway and is expected to be complete by
the fourth quarter of 2015. Customer contracts underpin the new
capacity. The facility will use the latest in high-tech advanced
manufacturing equipment, including digital x-ray for real-time quality
assurance, 3D printing of prototypes, blue light technology for more
comprehensive dimensional inspection data, and automated casting
furnaces with advanced controls to meet precise product specifications.

Indiana Governor Mike Pence, La Porte Mayor Blair Milo, and other state
and local dignitaries joined Alcoa executives, employees and community
members to celebrate the expansion which will create 329 jobs by 2019.

“Hoosiers are expert builders, constructing airplane components and
lifting our Indiana economy,” said Governor Pence. “Indiana-manufactured
goods serve industries in all corners of the world, reaching new heights
in business and, for Alcoa, in the skies. With the Hoosier State’s
commitment to creating a business-friendly environment, companies are
able to find the resources they need to soar in Indiana, a state that
works for business.”

The Indiana Economic Development Corporation has offered Alcoa up to $4
million in conditional tax credits based on the Company’s job creation
plans. In addition, the city of La Porte has approved tax incentives
worth $7.1 million over a 10-year period.

“The City of La Porte is proud to celebrate this momentous occasion with
the Alcoa Team,” said La Porte Mayor Blair Milo. “Over the years, La
Porte and Alcoa have developed a strong partnership due to Alcoa’s
industry-leading status as well as its leadership role within our
community. We are excited to grow that partnership in lock step as Alcoa
continues to enjoy growth and success.”

This is the second major aerospace investment by Alcoa in Indiana in two
years. In 2012, Alcoa announced construction of a $90 million greenfield
state-of-the-art aluminum
lithium facility
at its Lafayette operations. The facility is on
schedule to open later this year and will be capable of producing
upwards of 20,000 metric tons of Alcoa’s patented aluminum-lithium
alloys used to build dramatically lighter and lower-cost airplanes
versus composite alternatives.

These investments are profitably growing Alcoa’s aerospace business,
which had revenues totaling $4 billion in 2013. The Company holds
leading market positions in aerospace forgings, extrusions, jet engine
airfoils and fastening systems and is a leading supplier of structural
castings made of titanium, aluminum and nickel-based superalloys, which
are produced by its downstream business, Engineered Products and
Solutions (EPS). The Company also holds leading market positions in
aerospace sheet and plate produced by its midstream business, Global
Rolled Products (GRP). The Company’s value-add businesses, comprising
EPS and GRP, accounted for 58 percent of Alcoa’s first quarter 2014
revenues and 76 percent of the Company’s total segment after-tax
operating income.

Alcoa in Indiana
Alcoa employs nearly 3,200 people at three
operating locations in the state of Indiana: Warrick Operations, east of
Evansville, Ind., with 1,925 employees; Lafayette Operations with 745
employees and Alcoa Howmet in La Porte, Ind., with 470 employees who
manufacture highly engineered turbine components made of advanced
nickel-based superalloys for jet engines, industrial gas turbines and
other turbine-based transportation products.

Reinforcing Alcoa’s commitment to Indiana and in celebration of the
expansion, the Alcoa Foundation is granting $60,000 to Ivy Tech
Community College—Indiana’s largest public postsecondary institution and
the nation’s largest singly accredited statewide community college
system serving nearly 200,000 students annually. The funds will support
the launch of a nationally recognized certification program and a class
on Computer Numerical Control (CNC) Programming through which students
will be given core knowledge and skills needed to work in an advanced
manufacturing environment. Scholarship opportunities will be available
for these 8-12 week programs, which will connect students with local
manufacturers looking for skilled talent.

Editor’s Note: Caption for accompanying photo: Leading aerospace
manufacturer Alcoa today celebrated the start of construction of its
state-of-the-art, $100 million aerospace expansion (rendering shown
here) in La Porte, Indiana.

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About Alcoa
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
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