Alcoa continued its investment on value-add businesses in the first quarter

Alcoa continued to build out its value-add businesses in the first quarter by introducing innovative new products, investing in high-value expansions, and optimizing its rolling mill portfolio.

Within Engineered Products and Solutions (EPS), the Company’s downstream business, Alcoa introduced the world’s lightest heavy-duty truck wheel. The Ultra ONE™ is based on Alcoa’s newest and strongest aluminum wheel alloy, MagnaForce™. The 40-pound wheel weighs 47 percent less than comparable steel wheels, and can help save 1,400 pounds per rig for increased payload and better gas mileage. Over 150 fleets are specifying 67,000 Ultra ONE™ wheels since they were introduced.

In Hungary, Alcoa is investing $13 million in its wheel plant in Székesfehérvár to meet rising European demand for its Dura-Bright® surface-treated wheels. The expansion will enable Alcoa to produce twice as many Dura-Bright® surface-treated wheels in Europe by early 2015, compared with current production levels.

These portfolio enhancements support EPS’ three-year goal of generating $1.2 billion in incremental revenue growth by 2016, with $900 million coming from share gains and innovations.

Within Global Rolled Products (GRP), the Company’s midstream business, Alcoa announced a $40 million investment in its Itapissuma, Brazil rolling mill to increase production of specialty foils for aseptic and flexible packaging, the most highly differentiated type of container in packaging. To further improve the profitability of the rolling mill business, Alcoa will also close its two rolling mills in Australia by year-end. The mills serve the Australian and Asian can sheet markets, which have been impacted by excess capacity.

As demand for automotive sheet in North America ramps up, Alcoa commissioned the $300 million expansion at its Davenport, Iowa facility, and it is now fully operational. Progress continues on the automotive expansion at Alcoa, Tennessee, and the rolling mill at the Ma’aden-Alcoa joint venture is expected to produce the first auto coil in the fourth quarter of this year. Alcoa projects that the added capacity in Iowa and Tennessee alone will grow auto sheet revenues six fold from 2013 to over $1.3 billion in 2018.

These actions in the midstream will further optimize GRP’s mill portfolio and support its goal of generating $1.0 billion in incremental revenue growth by 2016, with $900 million through share gains and innovations.

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