Alcoa doubling high-tech coating capacity in Michigan to capture growing aerospace demand

Innovative Technology Improves Jet Engine Fuel Efficiency

• $16.7 million expansion in coating capabilities to improve performance of blades and vanes in hot section of bestselling, next-generation jet engines
• Construction to begin this month, production expected in 2016
• Investment supported by customer agreements
• Supports Company’s strategy to grow aerospace business, capture demand for advanced jet engine parts Alcoa Power and Propulsion, a unit of lightweight, high-performance metals leader Alcoa (NYSE: AA), is doubling its high-technology coating capacity at its Whitehall, Michigan facility. The $16.7 million investment will position the Company to further capture growing demand for advanced jet engine parts.

The 7,700 sq. ft. building expansion will be located at the Company’s Thermatech plant in Whitehall where it produces thermal coated parts that enable engines to run at higher temperatures, boosting engine efficiencies. The coating also extends the operating life of jet engine parts by protecting against oxidation and corrosion.

“Alcoa is a global leader in the production of airfoil jet engine components,” said Mike Pepper, President of Alcoa Power and Propulsion. “This expansion will enable us to continue providing our high level of service as we meet growing demands for our high-tech, Thermatech-coated parts that enable enhanced fuel efficiency.” Alcoa will install a new electron beam physical vapor deposition machine to boost capacity, which enables faster production by combining two important processes: the bond coat and the top coat. Construction will begin this month, with first production expected to begin in 2016. The expansion will create 25 new full-time jobs. Customer agreements underpin the new capacity.

The combination of advanced coatings and internal cooling schemes make it possible for investment cast airfoils to operate in an environment that reaches temperatures much greater than the airfoils’ melting point. In addition to jet engines, the coating process is applied to parts used to build industrial gas turbines.

The expansion supports Alcoa’s strategy of profitably growing its aerospace business, which achieved revenues totaling $4 billion in 2013 and is in line with Company strategy to build its value-add businesses to capture profitable growth in high-growth industries. The Company projects a compounded annual commercial jet growth rate of 7 percent through 2019 and sees a current 9-year production order book at 2013 delivery rates.

Demonstrating its support for the expansion, the Michigan Economic Development Corporation awarded a state business development grant to Alcoa totaling $285,000.

“As the largest manufacturing company in Muskegon County, Alcoa continues to be a leader in the aerospace industry and is home to the most advanced aerospace manufacturing facility in the world,” said Ed Garner, President & CEO of Muskegon Area First Economic Development Corp.

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