Boston, MA 01/17/2013 (wallstreetpr) – Alcoa Inc (NYSE:AA) is taking seriously its foray into production of aluminum sheets for the automotive industry. This seems to be the most viable way for the company to offset the upset presented by the weaker aluminum market. The company has just completed the expansion of one of its plants which is expected to boost value-add items production, mainly for the auto industry. The just completed plant is in Quad Cities, Iowa.
The Quad Cities plant expansion consumed $300 million, employed 150 people during the construction phase and now has another 150 workers on full-time basis. This rolling mill plant, like the other two lined-up, is dedicated to supplying aluminum sheets products for the automakers.
Supply agreement
The new Alcoa Inc (NYSE:AA) plant in Quad Cities is up to a good start as the company has already secured a long-term supply contract for sheet aluminum for the plant. Details about this new supply order for sheet aluminum have not been disclosed. However, we know that of late automakers such as Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have shown interest in manufacturing fuel-efficient, strong and light vehicles using aluminum. Ford in particular is expected to use value-added aluminum in its new version of F-150 Series trucks.
According to Klaus Kleinfeld, Alcoa Inc (NYSE:AA) chairman and CEO, 2014 could turn to be the beginning of rewarding business years for the company as growth of aluminum in auto sector increases. The CEO points out that auto companies will readily accept sheet aluminum for body construction because the material offers high performance, safety, durability and fuel compliance as required by the law.
Plant expand answers demand
It is now clear that Alcoa Inc (NYSE:AA) is investing in plant expansion to meet the demand surge expected from the automobile industry. The company has two more underway plant expansion projects where a plant in Tennessee is scheduled for completion in mid-2015 with another capacity plant being underway in Saudi Arabia. The Saudi plant is expected to be up and running by the end of 2014. The company has a budget of $670 million for the ongoing capacity expansion.
