Boston, MA 10/23/2013 (wallstreetpr) – Shares of Alcoa Inc (NYSE:AA) has been rising ever since news of the company to enter into a JV with VSMPO reached the market. The JV is expected to target aerospace products. VSMPO is world’s No. 1 titanium producer, which has also raised expectations from the JV. The JV has found opportunity in the growing demand from the sector, and hopes to make high end aerospace products which shall cater to the same.
To make the news more optimistic for Alcoa, the JV shall operate from Alcoa’s Samara facility in Russia, which currently makes flat-rolled products for forging and hard alloy extrusions. The new JV is expected to go into operation from 2016 itself. The company has thereby restructured its operations, shifting its focus from weak primary metal prices to value-added aluminum prices.
However, the JV needs to be careful of the intense competition that has developed in recent times. Also, the global aluminum industry has been striving to give a tough competition to new carbon composites in aerospace.
The company seems to have already geared up for such a JV, which is evident by the fact that it expanded its aluminum lithium capacity in the United Kingdom earlier this year. IT is also in the process to build a U.S. facility in Indiana to produce 20,000 tons per year of aluminum lithium. Such a lithium alloy is more fuel efficient and lower cost than carbon composites. This shows that the company has adequately been taking steps to remove any hindrance that might come its way in making it the leader in the aerospace industry.
This was also recently coupled by a better than expected 3Q13 results. Such a turnaround is attributed to its CEO, who brought in a host of changes and operations, which are geared towards bringing down costs and also increase operational efficiency.
