Alcoa Inc. is engaged in engineering and manufacturing lightweight metals. The company multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial applications. The company also produces and manages primary aluminum, fabricated aluminum, and alumina combined through its active participation in all major aspects of the industry, such as technology, mining, refining, smelting, fabricating, and recycling. It operates in 30 countries. In addition, the company has investments and operating activities in Australia, Brazil, China, Guinea, Iceland, Russia, and Saudi Arabia. Segments The company operates through four segments: Alumina, Primary Metals, Global Rolled Products, and Engineered Products and Solutions. Alumina This segment primarily consists of a series of affiliated operating entities referred to as Alcoa World Alumina and Chemicals (AWAC). The company owns 60% and Alumina Limited owns 40% of these individual entities. This segment represents a portion of the company’s upstream operations and consists of the company’s worldwide refinery system, including the mining of bauxite, which is then refined into alumina. Alumina is mainly sold directly to internal and external smelter customers worldwide or is sold to customers who process it into industrial chemical products. A portion of this segment’s third-party sales are completed through the use of agents, alumina traders, and distributors. As of December 31, 2013, the company had approximately 655,000 mtpy of idle capacity against total consolidated capacity of 4,037,000 mtpy. The company and Saudi Arabian Mining Company (Ma’aden) has a joint venture to develop an integrated aluminum complex in the Kingdom of Saudi Arabia. Primary Metals This segment represents a portion of the company’s upstream operations and consists of the company’s worldwide smelter system. This segment receives alumina, primarily from the Alumina segment, and produces primary aluminum used by the company’s fabricating businesses, as well as sold to external customers and traders. This segment also sells aluminum powder, scrap, and excess power. Global Rolled Products This segment represents the company’s midstream operations, whose principal business is the production and sale of aluminum plate, sheet, and specialty foil. A portion of this segment’s operations relate to foil produced at one plant in Brazil. This segment includes rigid container sheet (RCS), which is sold directly to customers in the packaging and consumer market and is used to produce aluminum beverage cans. This segment also includes sheet and plate used in the aerospace, automotive, commercial transportation, building and construction, and industrial products (primarily used in the production of machinery and equipment and consumer durables) end markets, which is sold directly to customers and through distributors. In November 2012, the company and China Power Investment Corporation established a joint venture company to produce fabricated aluminum products in China. Engineered Products and Solutions This segment represents the company’s downstream operations and includes titanium, aluminum, and super alloy investment castings; fasteners; aluminum wheels; integrated aluminum structural systems; architectural extrusions; and forgings and hard alloy extrusions. These products, which are used in the aerospace, automotive, building and construction, commercial transportation, power generation, and industrial products end markets, are sold directly to customers and through distributors. The company owns the aerospace fastener business of TransDigm Group Inc. This business is a designer, producer, and supplier of aircraft components, with three locations (one in the state of California and two in the United Kingdom). This business provides various high temperature nickel alloy specialty engine fasteners, airframe bolts, and slotted entry bearings. Seasonality Seasonal increases in RCS sales are experienced in the second and third quarters of the year (year ending December 2013). Patents, Trade Secrets, and Trademarks In 2013, the company’s worldwide patent portfolio consisted of approximately 794 pending patent applications and 1,980 granted patents. The company also has various domestic and international registered trademarks, including Alcoa and the Alcoa symbol for aluminum products, Howmet metal castings, Huck fasteners, Kawneer building panels, and Dura-Bright wheels with easy-clean surface treatments. Research and Development The company’s research and development expenditure was $192 million in 2013. Significant Events In June 2014, Alcoa is expanding in Virginia to capture demand for next-generation aircraft engine parts. In September 2014, Alcoa opened an aluminum-lithium plant in Lafayette, Indiana where it produces advanced, third-generation aluminum-lithium alloys for the aerospace industry. History Alcoa Inc., a Pennsylvania corporation, was founded in 1888.
alcoa inc - cdi
(AAI:Australian Stock Exchange Ltd)
390 Park Avenue
New York, NY 10022
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