(Photo: Alcoa)
NEW YORK – Alcoa has announced a second major North American expansion to meet the growing demand in aluminum sheet for automotive production.
The company will invest $275 million over the next three years to expand and convert capacity at its rolling mill in Alcoa, Tennessee.
Automotive producers have recently begun favouring the use of aluminum sheet because of its ability to increase fuel efficiency in cars and light trucks.
“More and more auto producers are turning to aluminum to increase the fuel efficiency and quality of their vehicles – we anticipate a quadrupling of auto sheet volume by 2015 and a tenfold increase by 2025,” said Alcoa Chairman and CEO, Klaus Kleinfeld.
The timing of the announcement is notable because it coincides with the company’s plans to curtail their aluminum production. That decision is based on a trend of lower aluminum prices in the international market.
The project will convert some of the plant’s can sheet capacity to high-strength automotive aluminum capacity, as well as install incremental automotive capacity.
The expansion will add 200 full-time jobs upon completion and more than 400 construction jobs.
The expansion is scheduled to begin this month and be completed by mid-2015.
Alcoa also previously announced a $300 million expansion of its Davenport, Iowa plant, which should be completed by the end of this year.
When completed, the plant will supply both the packaging and automotive markets with many long-term supply agreements already secured.
The project will incorporate, through Alcoa’s supply chain, the proprietary “Alcoa 951” pre-treatment bonding technology which enables adhesive bonding of automotive structures and is facilitating more cost-effective, mass production of aluminum intensive vehicles (AIVs).
The technology has become the new pre-treatment bonding standard for aluminum sheet, extrusion and casting suppliers across the automotive industry.
Alcoa is licensing the technology to the industry at the request of auto OEMs.
“Our technology solutions are helping to drive the continued penetration of aluminum into the automotive market,” said Dr. Ray Kilmer, Alcoa Executive Vice President and Chief Technology Officer.
“We are working with OEMs to do it cost effectively in high-volume automotive applications which, in turn, necessitates our automotive expansions.”
