Download - Alcoa and China: Partners in Growth
Alcoa and China: Partners in GrowthAlcoa and China: Partners in Growth
Bernt ReitanExecutive Vice President, Alcoa
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Alcoa at a glance
Leading aluminum products company Primary aluminum and alumina Flat-rolled aluminum and hard-alloy extrusions
Active in all major segments of the industry: Technology ▪ Smelting Mining ▪ Fabricating Refining ▪ Recycling
Products serving the aerospace, automotive, commercial transportation, packaging, building and construction, and industrial
markets.
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Financial performance - 2008
11%
30%
36%
21%
2%
Engineered Solutions
Alumina
Primary Metals
Flat Rolled
Packaging & Consumer
2008 3rd Party Revenue by Segment 2008 ATOI by Segment
Engineered Solutions
Alumina
Flat Rolled
Primary Metals
Packaging & Consumer
Total Revenue: $26.9 Billion
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34 Countries 87,000 Employees
Global organization
United States, 53%
Europe, 26%
Pacific, 15%
Other Americas,
6%
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Alcoa Primary Operations
RefinerySmelterStand-alone bauxite mine
RefinerySmelterStand-alone bauxite mine
North America:Smelting 2.8M tonnesRefining 2.3M tonnes
Latin America:Smelting 0.3M tonnesRefining 2.6M tonnes
Europe:Smelting 0.6M tonnesRefining 1.3M tonnes
Australia:Smelting 0.4M tonnesRefining 7.8M tonnes
Key Facts (2003):
• 27 smelters on 5 continents
• 9 refineries on 4 continents
• 4.0 mmt Aluminum Capacity 13% of world’s metal
• 14.0 mmt of alumina - 24% of world’s capacity
• $5.2 billion in 3rd
Party Revenue
Key Facts (2005)
•26 Smelters on 5 continents
•9 refineries on 4 continents
•3.6 mmt Aluminum Production 11% of world output
•14.6 mmt Alumina production – 24% of world output
•$6.8 billion in 3rd
Party RevenueRefinerySmelterStand-alone bauxite mine
RefinerySmelterStand-alone bauxite mine
North America:Smelting 2.8M tonnesRefining 2.3M tonnes
Latin America:Smelting 0.3M tonnesRefining 2.6M tonnes
Europe:Smelting 0.6M tonnesRefining 1.3M tonnes
Australia:Smelting 0.4M tonnesRefining 7.8M tonnes
Key Facts (2003):
• 27 smelters on 5 continents
• 9 refineries on 4 continents
• 4.0 mmt Aluminum Capacity 13% of world’s metal
• 14.0 mmt of alumina - 24% of world’s capacity
• $5.2 billion in 3rd
Party Revenue
Key Facts (2005)
•26 Smelters on 5 continents
•9 refineries on 4 continents
•3.6 mmt Aluminum Production 11% of world output
•14.6 mmt Alumina production – 24% of world output
•$6.8 billion in 3rd
Party Revenue
Key Facts (2008)• 25 Smelters on 5
continents
• 9 refineries on 4 continents
• 4.0 mmt Aluminum Production
• 15.3 mmt Alumina production – 23% of world output
• $10.9 billion in 3rd Party Revenue
• $17.6 billion total Revenue including intercompany sales to downstream operations
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Sustainable aluminum production
Sustainable energy production Energy conservation Emissions management Sustainable repowering Sustainable capacity growth
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Leader in sustainable energy
More than a century of hydropower expertise new technology improving yield of existing projects
– LIHI certification Cogeneration at Wagerup and Pinjarra Sustainable biofuels for plant equipment Green Power – renewable energy contracts Geothermal
Under consideration for proposed second smelter in Iceland
Calderwood dam, Tennessee
Pinjarra cogeneration plant
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Sustainable growth in Iceland
Alcoa Fjardaal 344,000 mtpy capacity Compliant with
Iceland’s stringent environmental requirements
North Iceland Possible second
smelter site in Bakki Phase 2 feasibility
study Geothermal power
under consideration
First shipment of alumina, Alcoa Fjardaal, Iceland – 28 March 2007
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Sustainable growth: Greenland
MOU signed May 2007 340,000 mtpy greenfield
smelter Hydropower system Infrastructure On line 2014
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A values-driven company
Integrity Environment, Health and Safety Customer Excellence People Profitability Accountability
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Committed to sustainability
2020 Strategic
framework
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Land stewardship
Reclamation Conservation/biodiversity Management
Alcoa-sponsored environmental parks, Brazil
Award-winning forest restoration, Australia
Great Smoky Mountains conservation agreement, USA
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Safety leader
Alcoa facilities worldwide are 10 times safer than U.S average 76% of Alcoa facilities had zero lost workdays in 2008
Lost Workday Rate
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Alcoa
US Manufacturing
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Community support
Commitment to Communities - 2007 Alcoa and Alcoa Foundation investments totaled
$49 million More than 634,000 volunteer work hours $8 million for climate change projects $1 million for recycling projects
Qinglong Alcoa Hope School Grand Opening -- 2005
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Energy conservation: recycling
Scrap recycling center, Hungary
Growth in recycled content -- 2005-2007
0
200
400
600
800
1000
2005 2006 2007
Currently Alcoa uses nearly 900,000 mt/year of recycled aluminum – nearly 25% of primary production
mt
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Recognition
Sustainability Most Sustainable Corporation / World Economic Forum in Davos Dow Jones Sustainability Index
Climate Change Founding Reporter of the Climate Registry Top Green Company – BusinessWeek and the Climate Group Low Carbon Pioneer – CNBC European Business Best in Class – Carbon Disclosure Project Leader in climate change and governance – CERES Carbon Disclosure Leadership Index
20082008
Alcoa: a Partner in China’s GrowthAlcoa: a Partner in China’s Growth
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1980s CNNC* Technology relationship established
1993 Beijing Established representative office
1994 Tianjin Closures business
1995 Shanghai Aluminum foil Joint Venture
1996 CNNC* 30-year alumina supply contract
Kunming Aluminum foil Joint Venture
1997 Qinhuangdao Formed original Bohai cold mill and extrusion Joint Venture
1999 Qingdao Alumina chemicals plant
2001 Chinalco Support of Chinalco reform program – purchased 8% interest in successful Chalco IPO
2002 Pingguo Submitted JFS for Joint Venture to NDRC for approval
2003 Shanghai Expanded Foil Joint Venture
2004 Bohai Submitted pre-feasibility study for hot mill
Chalco Further investment to maintain 8% stake
2005 Guangxi Investigated direct investment in power assets
Hangzhou Formed closures business
Shanghai Acquired remaining 40% of Foil Joint Venture and established warehousing facility
Bohai NDRC approval granted for Joint Venture restructuring
Qinghuangdao Inaugurated Bohai Joint Venture with China International Trust & Investment (CITIC)
2006 Kunshan Acquired 70% stake in brazing sheet Joint Venture
2007 Bohai Construction of new hotmill on-track for 2009
2008 Chinaclo Investment partner with Chinalco in Rio Tinto
Yutong Bus Strategic partnership with Yutong Bus Co.
Alcoa’s History in China
Our pace is Accelerating* Now Sino Metals
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Overview
Hainan
Guanlu
Foil – Kunming*Corporate and Offices
Flat Rolled Products Locations
Other Alcoa Locations
Sales – Hong Kong
Sales - Guangzhou
Headquarters - Beijing
AEES – Shanghai*
Sourcing - Shanghai
Sheet and Foil* - Bohai
Foil – Shanghai* Sales - Shanghai
Brazing Sheet - Kunshan
Fasteners - ShanghaiFasteners - Suzhou
ALCOA’S ASSETS AND LOCATIONS IN CHINA
Shared Service - Bohai
Shared Service - Shanghai
Not operated directly by
Alcoa
13 locations1926 employees
* Foil and AEES operations are scheduled for divestiture in 2009
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Investing in China’s growth
$700 million invested since 1993
$1 billion planned by 2010
Alcoa will be one of China’s top 10 investors
Member of China Association of Enterprises with Foreign Investment (CAEFI)
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Major Alcoa China Facilities
Location
JV commenced
Alcoa equity
Key Products
Recent activity:
Qinhuangdao, Hebei
Jun. 2000 / October 2005
73%
FRP: incl. finstock, beerwrap, cable warp, household foil, standard sheet, etc.
• Construction of the hot mill is underway• Key equipments include one 1+3 2250mm HM, one 2200mm VAI CM, and three 2200 VAI FMs
Alcoa Bohai Aluminum Co.
Kunshan, Jiangsu
Apr.2006
70%
Brazing sheet for HVAC, common-alloy sheet
N/A
Alcoa Kunshan
Suzhou, Jiangsu
Apr.2006
100%
Aerospace fastening systems, fasteners for commercial transportation, rail & car applications
N/A
AFS Suzhou
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Living Alcoa’s Values in China
Member of China Business Council for Sustainable Development (CBSD)
More than $2.2 million in community investments since 2003
Hundreds of volunteers in Alcoa’s annual Month of Service
Education
Conservation
Community Service
Health
Alain Belda honored by Asia Society for Environmental Leadership Bohai rolling mill
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Alcoa Partnerships for Sustainability in China
Zhengzhou Yutong Bus•World-class structural design, materials and manufacturing technologies •A new generation of energy-efficient, environmentally-friendly buses for China’s growing commuting public.•Up to 46% lighter bus body
Beijing Public Transport Holdings Ltd. •Alcoa Wheels used since 2007. •2.5% fuel savings•18.1% longer tire life•Alcoa wheels chosen for fleet of 50 electric buses for 2008 Beijing Olympic Games
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Partnerships for progress
Beijing International Airport Terminal 3Alcoa Architectural Products provided world class preprinted aluminum Reynolux coil for about 300,000 square meters
National Gymnasium – 2008 Olympic GamesMore than 29,000 square meters of Alcoa Architectural Products’ Reynolux coil coated aluminum sheet
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Alcoa: a Dependable Partner for a Sustainable Future
•Nearly three decades in China•World leader in aluminum technology and sustainability•Engaged with our communities throughout China•Contributing to China’s growth•Dedicated to China’s Future
500,000 safe hours at Bohai.
-- January 2007
Alcoa can’t wait for tomorrow!