Alcoa announces Global Trends Driving Increased Aluminum Demand

Monday, May 09, 2020

The world is undergoing fundamental shifts that will shape the next 50 years — trends that will increase demand for aluminum and products made by Alcoa, Company Chairman and CEO Klaus Kleinfeld told investors at Alcoa’s 123rd Annual Meeting of Shareholders, held today in Pittsburgh.

Kleinfeld also reported that the company’s joint venture in Saudi Arabia is on schedule, and he paid tribute to retiring director Joseph T. Gorman, a member of the Alcoa board since 1991.

Kleinfeld presented an upbeat view of an “aluminizing” world, where population growth and urbanization are driving demand for more efficient infrastructure and transportation solutions.

“The world is experiencing fundamental shifts that will shape the next 50 years,” Kleinfeld said. “We will experience changes in all aspects of life – where we live, what we consume, how we travel. These trends are driving worldwide growth and demand for aluminum.”

The result will be expanding opportunities for those who are quick to innovate, which Kleinfeld called “a major sustainable advantage” for Alcoa.

“By understanding our customers and our customers’ customers, we are constantly creating value-added solutions,” he said.

Alcoa is projecting growth in nearly all end markets in 2011, including major markets such as automotive and aerospace, as society increasingly demands more efficient cars to meet emission standards and lighter, more fuel-efficient and comfortable airplanes. “Each of these markets is growing and evolving. We will capture this growth through our innovative new applications and our unique connection to our customers,” Kleinfeld said.

Aluminizing the World

Alcoa expects a 6.5 percent compound annual growth rate in aluminum demand, or roughly a doubling in global consumption and supply by 2020 from a 2010 baseline.

“The number of applications where aluminum is the material of choice is expanding and that foreshadows staggering growth for our miracle metal. This growth, in turn, will cause growth in both bauxite and alumina,” Kleinfeld said.

In bauxite, Alcoa forecasts growth from 214 million metric tons per year (mtpy) to 400 million mtpy. In alumina, growth from 82 million mtpy to 156 million mtpy is expected, and, in aluminum, Alcoa foresees growth from 39 million mtpy to 73 million mtpy.

Solid Progress on Ma’aden Joint Venture

Kleinfeld also updated shareholders on the status of Alcoa’s joint venture project with Ma’aden, the Saudi Arabian Mining Company. The joint venture will feature the Middle East’s first fully integrated aluminum smelter and food-grade can sheet rolling mill. All major equipment has been ordered, and groundbreaking on the state-of-the-art rolling mill in Ras Az Zawr, Saudi Arabia, took place last month. First commercial production from the 740,000-mtpy smelter – which will include a potline that is an astounding one-mile long – and 380,000-mtpy rolling mill is scheduled for 2013. The bauxite mine and refinery are set to begin operations in 2014. The mine will have initial capacity of 4 million mtpy and the alumina refinery an initial capacity of 1.8 million mtpy.

Retiring Director, New Executive VP and Shareholder Votes

In other business, Kleinfeld recognized retiring director Joseph T. Gorman, Chairman and CEO of Moxahela Enterprises LLC, a venture capital firm, and former chairman of TRW, Inc., a global company serving the automotive, space and information systems markets.

“Joe is retiring after 20 years of service as an Alcoa director. Just last year, under his leadership as Chairman of the Compensation and Benefits Committee, the group undertook a comprehensive review of executive compensation to ensure compliance with good governance practices,” Kleinfeld said. “For two decades, Joe has shared with Alcoa his deep business experience, which he gained as Chairman and CEO of TRW. We have all benefited greatly from his steady counsel and commitment to Alcoa’s success.”

With the retirement of Mr. Gorman, there are now 10 members on Alcoa’s Board of Directors.

In addition, Alcoa’s Board of Directors elected Dr. Raymond J. Kilmer an executive vice president of Alcoa. He was recently named Chief Technology Officer, succeeding Dr. Mohammad Zaidi, who will retire August 1, 2020.

The following preliminary voting results were announced at the meeting: Kleinfeld, James W. Owens, retired Chairman and CEO of Caterpillar Inc., and Ratan N. Tata, Chairman Tata Sons Ltd., the holding company of the Tata Group, were elected for new three-year terms expiring in 2014. Shareholders approved an advisory vote on executive compensation and supported an annual advisory vote on executive compensation. An annual cash incentive compensation plan was approved and retention of PricewaterhouseCoopers as the independent auditors was ratified. Elimination of the super-majority voting requirements did not receive sufficient shareholder support for approval. Advisory votes on two shareholder proposals were approved by a majority of the votes cast at the meeting. Final results will be filed on a Form 8-K within four business days of the meeting.

A copy of presentations from the annual meeting can be found at www.alcoa.com/annualmeeting. A replay of the webcast can also be accessed at this site.

Source: Alcoa