Alcoa

Alcoa, Inc.
Type Public (NYSE: AA)
Dow Jones Industrial Average component
Industry Aluminum
Founded Pittsburgh, Pennsylvania, U.S. (1888)
Founder(s) Charles Martin Hall
Headquarters New York, New York
Pittsburgh, Pennsylvania
Area served Worldwide
Key people Klaus Kleinfeld
(Chairman and Chief Executive Officer),(Director)
Revenue increase US$18.4 Billion (FY 2009)[1]
Operating income increase US$-1.25 billion (FY 2009)[1]
Net income decrease US$-1.15 billion (FY 2009)[1]
Total assets increase US$ 38.472 billion (2009)
Total equity increase US$ 15.520 billion (2009)
Employees 59,000 (2009)
Subsidiaries Halco Mining
Kawneer
Howmet Castings
Website Alcoa.com
References: [2][3]

Alcoa, Inc. (NYSE: AA) (from ALuminum Company Of America) is the world's third largest producer of aluminum, behind Rio Tinto Alcan and Rusal.[4] From its operational headquarters in Pittsburgh, Pennsylvania, Alcoa conducts operations in 31 countries. Alcoa is a world leader in the production and management of primary aluminum, fabricated aluminum, and alumina combined, through its active and growing participation in all major aspects of the industry: technology, mining, refining, smelting, fabricating, and recycling. Aluminum and alumina represent more than three-fourths of Alcoa’s revenue. Non-aluminum products include precision castings and aerospace and industrial fasteners. Alcoa’s products are used worldwide in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, and industrial applications.

In May 2007 Alcoa made a $27 billion hostile takeover bid for Alcan, a former subsidiary, aiming to unite the two companies and form the world's largest aluminum producer. The takeover bid was withdrawn after Alcan announced a friendly takeover by Rio Tinto in July 2007.

Among Alcoa's other businesses are fastening systems, building products (Kawneer)and Howmet Castings.[5] The sale of the packaging unit was announced on December 21, 2007[6] and closed in the first quarter of 2008.

Contents

History

In 1886, Charles Martin Hall, a graduate of Ohio's Oberlin College, discovered the process of smelting aluminum, almost simultaneously with Paul Héroult in France. He realized that by passing an electrical current through a bath of cryolite and aluminum oxide, the then semi-rare metal aluminum remained as a byproduct. This discovery, now called the Hall-Héroult process, is still the only process used to make aluminum worldwide.

Probably fewer than ten sites in the United States and Europe produced any aluminum at the time. In 1887, Hall made an agreement to try his process at the Electric Smelting and Aluminum Company plant in Lockport, New York but it was not used and Hall left after one year. On Thanksgiving Day 1888, with the help of Alfred E. Hunt, he started the Pittsburgh Reduction Company with an experimental smelting plant on Smallman Street in Pittsburgh, Pennsylvania. In 1891, the company went into production in New Kensington, Pennsylvania. In 1895 a third site opened at Niagara Falls. By about 1903, after a settlement with Hall's former employer, and while its patents were in force, the company was the only legal supplier of aluminum in the US.[7][8]

"The Aluminum Company of America"—became the firm's new name in 1907. The acronym "Alcoa" was coined in 1910, given as a name to two of the locales where major corporate facilities were located (although one of these has since been changed), and in 1999 was adopted as the official corporate name.

In 1938, the Justice Department charged Alcoa with illegal monopolization, and demanded that the company be dissolved. The case of United States v. Alcoa was settled 6 years later.

Alcoa established an 8% stake in China's state-run aluminum industry and has formed a strategic alliance with Aluminium Corporation of China (Chalco), China's largest aluminum producer, at its Pingguo facility. Alcoa sold this stake on September 12, 2007.[9]

Alcoa has also acquired two facilities in Russia, at Samara and Belaya Kalitva. Alcoa recently launched an offer to purchase the remaining 18% of the Belaya Kalitva plant from minority shareholders, giving it complete ownership in the facility.

In 2004, Alcoa's specialty chemicals division was sold to Rhône Group, who then changed the name to Almatis, Inc..

In 2005, Alcoa began construction in Iceland on Alcoa Fjarðaál, a state-of-the-art aluminum smelter and the company's first greenfield smelter in more than 20 years, albeit under heavy criticism by local and international NGOs related to a controversial dam project exclusively dedicated to supplying electricity to this smelter. Also, Alcoa has completed or is undergoing primary aluminum expansion projects in Brazil, Jamaica, and Pinjarra, Western Australia.

In 2006, Alcoa relocated its top executives from its headquarters in Pittsburgh to New York City. Although the company's principal office is located in New York City, the company's operational headquarters are still located at its Corporate Center in Pittsburgh. Alcoa employs approximately 2,000 people at its Corporate Center in Pittsburgh and 60 at its principal office in New York.[10]

Alcoa was named one of the top three most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland.

On 8 May 2008, Klaus Kleinfeld was appointed new CEO of ALCOA substituting Alain Belda. On April 23, 2010 Alcoa’s Board of Directors elected Mr. Kleinfeld to the office of Chairman, following Mr. Belda’s planned retirement.

Environmental record

The Political Economy Research Institute ranks Alcoa 15th among corporations emitting airborne pollutants in the United States. The ranking is based on the quantity (13 million pounds in 2005) and toxicity of the emissions.[11] In April 2003, Alcoa Inc. agreed to spend an estimated $330 million to install a new coal-fired power plant with state-of-the-art pollution controls to eliminate the vast majority of sulfur dioxide and nitrogen dioxide emissions from the power plant at Alcoa's aluminum production facility in Rockdale, Texas. The settlement was the ninth case the Bush administration pursued to bring the coal-fired power plant industry into full compliance with the Clean Air Act. Alcoa was unlawfully operating at the Rockdale facility since it overhauled the Rockdale power plant without installing necessary pollution controls and without first obtaining proper permits required by "New Source Review" program of the Clean Air Act.[12] In February 1999, Alcoa cleaned soils and sediment contaminated with polychlorinated biphenyls (PCB) and lead at the York Oil federal Superfund site in Moira, New York in accordance with the Environmental Protection Agency. The site, a former waste oil recycling storage facility, accepted waste oil from a number of companies, including Alcoa. The facility was improperly managed and operated and, as a result, soils on the York Oil Property and nearby wetlands sediments and groundwater were contaminated. The United States Environmental Protection Agency‎ (EPA) issued a Superfund Unilateral Order on December 31, 1998 requiring Alcoa to excavate, treat and dispose of the contaminated wetlands sediments.[13]

Alcoa in Ghana

Alcoa's affiliate in Ghana, the Volta Aluminum Company, was completely closed between May 2003 and early 2006, due to problems with its electricity supply.[14][15]

Alcoa in Iceland

By the middle of September, over 50% of the Alcoa Fjarðaál smelter construction in Iceland has been finished. The total workforce on site is 1,750 people, of which 80% are of Polish origin. It was expected to be on line by 2007. Alcoa and the government of Iceland have signed an agreement on instigating a thorough feasibility study for a new 250,000 tpy (Tons Per Year) smelter in Bakki by Húsavík in Northern Iceland. In order to power Alcoa's new smelters in Iceland, tracts of wilderness are being flooded to provide hydroelectric energy. Alcoa does not own the kárahnjúkar powerplant.

Alcoa in the United Kingdom

Kitts Green, Birmingham, England

Established shortly before World War II, the facility at Kitts Green, Birmingham has produced many aluminium products. Throughout the 1960s, 70s and 80s the plant became focused on flat-rolled products for the aerospace industry.[16] As of 2007 the plant employed approx 530 employees.

Swansea, South Wales

On November 21, 2006, Alcoa announced that it planned to close the Waunarlwydd works in Swansea, with the loss of 298 jobs. Production ceased at the Swansea plant on January 27, 2007 and it has since been sold by Alcoa.[17]

Alcoa in Australia

Alcoa operates bauxite mines, alumina refineries and aluminum smelters through Alcoa World Alumina and Chemicals, which is a joint venture between Alumina Limited and Alcoa. Alcoa operates two bauxite mines in Western Australia - the Huntly and Willowdale mines. Alcoa World Alumina and Chemicals owns and operates three alumina refineries in Western Australia: Kwinana, Pinjarra and Wagerup. The Wagerup expasion plans have been put on hold due to the Global Financial Crisis. Two aluminum smelters are also operated in the state of Victoria at Portland and Point Henry. Alcoa Australia Rolled Products a 100% Alcoa Inc. venture, operates two rolling mills. The Point Henry Rolling mill in Victoria and the Yennora rolling mill in N.S.W. have a combined rolling capacity of approx. 200,000 tonnes. Alcoa uses 12,600 GW or 28% of Victoria's electricity annually.[18]

Alcoa's Western Australian Wagerup plant has a troubled history in the context of claims that pollution from the plant has had an adverse impact on the health of members of the adjacent local community.[19][20][21]

Alcoa in the United States

Alcoa created a plant just outside of Maryville, TN in Blount County, Tennessee, which was the biggest provider of aluminum in the South. The area needed housing for workers, so Alcoa built many houses. The area eventually turned into a city and the wife of Alcoa hydro engineer James Rickey came up with the name Alcoa as an acronym for Aluminum Company of America. The name Alcoa was, therefore, created specifically to name the town Alcoa, Tennessee, which was founded in 1919. Over time, the name Alcoa was unofficially used to reference the company as well. The Aluminum Company of America officially changed its name to Alcoa, Inc. in 1999.

Alcoa maintains several Research and Development Centers in the United States. The largest one, Alcoa Technical Center, is located East of its Pittsburgh Headquarters at Alcoa Center, PA. The "Tech Center" is as large as some college campuses, has its own Zip Code and maintains an extensive intellectual and physical resource for innovation. Alcoa's extensive safety program continuously improves safety at the Tech Center. After Paul O'Neill became Alcoa CEO in 1987, Alcoa became one of the safest companies in the world, despite the aluminum industry's inherent risks.[22]

The Physical plant of the Tech Center is situated in a rural area and has managed to cultivate a large wooded area which acts as a nature preserve, sheltering deer and other wildlife. It is not uncommon to see Deer and other wildlife freely circulating through the environs of the Tech Center at all hours of the day.

Alcoa World Alumina and Chemicals

Alcoa owns and operates the majority of its alumina refineries through its 60% share of Alcoa World Alumina and Chemicals.

Alcoa primary aluminum smelters

Alcoa has interests in 25 primary aluminum smelters in 8 countries.

Alcoa smelters[23][24]
Country Location Equity ownership Plant Total Nameplate capacity (kt per year) Alcoa's Capacity (kt per year)
AustraliaAustralia Point Henry 100% 190 190
AustraliaAustralia Portland 55% 358 197
BrazilBrazil Poços de Caldas 100% 96 96
BrazilBrazil São Luís (Alumar) 60% 447 268
CanadaCanada Baie Comeau* 100% 385 385
CanadaCanada Bécancour 75% 413 310
CanadaCanada Deschambault 100% 260 260
IcelandIceland Fjarðaál 100% 344 344
ItalyItaly Fusina 100% 44 44
ItalyItaly Portovesme 100% 150 150
NorwayNorway Lista 100% 150 150
NorwayNorway Mosjøen 100% 188 188
SpainSpain Avilés 100% 93 93
SpainSpain La Coruña 100% 87 87
SpainSpain San Cibrao 100% 228 228
United StatesUnited States Alcoa, TN** 100% 215 215
United StatesUnited States Badin, NC** 100% 60 60
United StatesUnited States Evansville, IN (Warrick)* 100% 309 309
United StatesUnited States Ferndale, WA (Intalco)* 100% 279 279
United StatesUnited States Frederick, MD (Eastalco)** 100% 195 195
United StatesUnited States Massena (East Plant), NY** 100% 125 125
United StatesUnited States Massena (West Plant), NY 100% 130 130
United StatesUnited States Mount Holly, SC 50% 229 115
United StatesUnited States Rockdale, TX** 100% 267 267
United StatesUnited States Wenatchee, WA*** 100% 184 184

*One idle potline
**Temporarily curtailed
***Two idle potlines

See also

References

  1. ↑ 1.0 1.1 1.2 Alcoa's annual income statement via Wikinvest
  2. ↑ "It all starts with dirt". Alcoa, Inc.. http://www.alcoa.com/global/en/about_alcoa/dirt.asp. Retrieved 2008-08-07. 
  3. ↑ "Alcoa, Inc.". Google Finance. http://finance.google.com/finance?q=AA. Retrieved 2008-08-07. 
  4. ↑ "Gimme Smelter". The Economist. 2007-07-19. http://www.economist.com/business/displaystory.cfm?story_id=9517201. Retrieved 2007-10-15. 
  5. ↑ Alcoa "About Alcoa". Alcoa, Inc.. http://www.alcoa.com/global/en/about_alcoa/overview.asp/About Alcoa. Retrieved 2007-10-15. 
  6. ↑ Alcoa, Inc.. "Form 8-K". United States Securities and Exchange Commission. http://www.sec.gov/Archives/edgar/data/4281/000119312507270909/d8k.htm. Retrieved 2007-12-31. 
  7. ↑ Hachez-Leroy, Florence (2006) (PDF). Aluminum industry: a Heritage for Europe. Proceedings, TICCIH Congress. http://www.ticcihcongress2006.net/paper/Paper%2010/Hachez%20Leroy.pdf. Retrieved 2007-11-03. 
  8. ↑ Rosenbaum, David Ira (1998). Market Dominance: How Firms Gain, Hold, or Lose It and the Impact on Economic Performance. Praeger Publishers via Greenwood Publishing Group. p. 56. ISBN 0275956040. http://www.greenwood.com/catalog/C5604.aspx. Retrieved 2007-11-03. 
  9. ↑ "News: News Releases: Alcoa Sells Its Stake in Chalco; Will Continue Its Commitment to Chinese Aluminum Industry". Alcoa. 2007-09-12. http://www.alcoa.com/global/en/news/news_detail.asp?pageID=20070912005913en&newsYear=2007. Retrieved 2010-07-13. 
  10. ↑ Boselovic, Len (2006-02-27). "Alcoa's HQ relocation to NYC no big surprise". Post-gazette.com. http://www.post-gazette.com/pg/06058/661831-28.stm. Retrieved 2010-07-13. 
  11. ↑ "Political Economy Research Institute - Toxic 100". Peri.umass.edu. http://www.peri.umass.edu/toxic100_index/. Retrieved 2010-07-13. 
  12. ↑ "U. S. Announces Clean Air Act Coal-fired Power Plant Settlement with Alcoa - Settlement Will Reduce Nitrogen Oxide and Sulfur Dioxide Emissions from Facility by More than 90 P". Yosemite.epa.gov. http://yosemite.epa.gov/opa/admpress.nsf/a883dc3da7094f97852572a00065d7d8/b427413dc6cc9c2285256d0300674514!OpenDocument. Retrieved 2010-07-13. 
  13. ↑ "Alcoa To Carry Out EPA's Order and Expand Cleanup at Superfund Site in Moira, New York To Contaminated Wetlands Sediments | Newsroom | US EPA". Yosemite.epa.gov. http://yosemite.epa.gov/opa/admpress.nsf/b1ab9f485b098972852562e7004dc686/0a8e77c5774a23a585257245005d39a1!OpenDocument. Retrieved 2010-07-13. 
  14. ↑ [http://web.archive.org/web/20070926005005/http://www.gcsinvestments.com/downloads/companyreports/ALW+REPORT+2006.pdf Aluworks limited (ALW) – Half year best performing stock] July, 2006
  15. ↑ "Alcoa in Ghana: News: News From Ghana: Alcoa, Government of the Republic of Ghana Agree to Re-Start Valco Smelter". Alcoa.com. 2005-08-04. http://www.alcoa.com/ghana/en/news/releases/ghana_valcosmelter.asp. Retrieved 2010-07-13. 
  16. ↑ Case study – Alcoa University of Lancaster Business School
  17. ↑ Eade, Christine (2008-04-18). "Alcoa sells vacant factory for £13m | Markets - print". Property Week. http://www.propertyweek.com/story.asp?sectioncode=39&storycode=3111470. Retrieved 2010-07-13. 
  18. ↑ "http". //www.futureenergy.org. 2003-07-15. http://www.futureenergy.org/infopolluting.html. Retrieved 2010-07-13. 
  19. ↑ "Something in the Air.". Australian Broadcasting Commission - ABC Four Corners. 2005-03-10. http://www.abc.net.au/4corners/content/2005/s1471209. Retrieved 2009-12-24. 
  20. ↑ "Alcoa pleads not guilty over Wagerup dust.". Australian Broadcasting Commission - ABC News. 2009-07-23. http://www.abc.net.au/news/stories/2009/07/23/2634388.. Retrieved 2009-12-24. 
  21. ↑ "Alcoa says health complaints 'unfounded'.". Australian Broadcasting Commission - ABC News. 2009-12-06. http://www.abc.net.au/news/stories/2009/06/12/2597075.htm. Retrieved 2009-12-24. 
  22. ↑ Fast Company magazine Jul 1, 2009 - Note: Dubious Source
  23. ↑ "Alcoa smelting capacity". http://www.alcoa.com/primary_eu/en/alcoa_primary_eu/capacity.asp#. Retrieved 2009-10-29. 
  24. ↑ "Alcoa: Worldwide: Markets: Aluminum Ingot Products: Global Capacity". http://www.alcoa.com/ingot/en/capacity.asp. Retrieved 2007-08-28. 

External links