Transcript Alcoa and China: Partners in Growth

Alcoa and China: Partners in Growth
Bernt Reitan
Executive Vice President, Alcoa
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
Total Revenue: $26.9 Billion
2008 3rd Party Revenue by Segment
2008 ATOI by Segment
Packaging &
1% Consumer
Engineered
Solutions
Flat Rolled
36%
23%
Alumina
33%
Flat Rolled
Engineered
Solutions
1%
21%
Primary Metals
30%
Primary Metals
2%
Alumina
11%
Packaging &
Consumer
42%
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Global organization
Other
Americas,
6%
Pacific, 15%
United
States, 53%
34 Countries
87,000 Employees
Europe, 26%
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Alcoa Primary Operations
Key
KeyFacts
Facts(2008)
(2005)
• 25 Smelters on 5
•26
Smelters on
continents
5
continents
• 9 refineries on 4
continents
•9 refineries on 4
•continents
4.0 mmt Aluminum
Production
Aluminum
••3.6
15.3 mmt
mmt Alumina
production – 23%
of of
Production
11%
world output
world output
• $10.9 billion in 3rd Party
•14.6
mmt Alumina
Revenue
– 24% of
•production
$17.6 billion total
Revenue
including
world
output
intercompany sales to
downstream
•$6.8
billionoperations
in 3rd
Party Revenue
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Sustainable aluminum production
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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
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Cogeneration at Wagerup and Pinjarra
Sustainable biofuels for plant equipment
Green Power – renewable energy contracts
Geothermal
Calderwood dam, Tennessee
 Under consideration for proposed second smelter
in Iceland
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
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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
Award-winning forest
restoration, Australia
Alcoa-sponsored
environmental parks,
Brazil
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
3.50
Alcoa
3.00
US Manufacturing
2.50
2.00
1.50
1.00
0.50
0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
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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
mt
1000
800
600
400
200
0
2005
2006
2007
Growth in recycled content -- 2005-2007
Currently Alcoa uses nearly 900,000
mt/year of recycled aluminum –
nearly 25% of primary production
Scrap recycling center, Hungary
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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
2008
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Alcoa: a Partner in China’s Growth
Alcoa’s History in China
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
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
2005
Yutong Bus
* Now Sino Metals
Strategic partnership with Yutong Bus Co.
Our pace is Accelerating
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Overview
ALCOA’S ASSETS AND LOCATIONS IN CHINA
13 locations
1926 employees
Headquarters - Beijing
Sheet and Foil* - Bohai
Shared Service - Bohai
Fasteners
- Suzhou
Guanlu
Fasteners - Shanghai
Foil – Shanghai*
Shared Service - Shanghai
Corporate and Offices
Flat Rolled Products Locations
Other Alcoa Locations
Foil – Kunming*
Not operated
directly by
Alcoa
Brazing Sheet - Kunshan
AEES – Shanghai*
Sales - Shanghai
Sourcing - Shanghai
Sales - Guangzhou
Hainan
Sales
– Hong Kong
* 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
Alcoa Bohai
Aluminum Co.
Alcoa Kunshan
AFS Suzhou
Location
Qinhuangdao, Hebei
Kunshan, Jiangsu
Suzhou, Jiangsu
JV commenced
Jun. 2000 / October 2005
Apr.2006
Apr.2006
Alcoa equity
73%
70%
100%
Key Products
FRP: incl. finstock, beer
wrap, cable warp,
household foil, standard
sheet, etc.
Brazing sheet for
HVAC, common-alloy
sheet
Aerospace
fastening systems,
fasteners for
commercial
transportation, rail
& car applications
Recent activity:
• Construction of the hot
mill is underway
• Key equipments
include one 1+3 2250mm
HM, one 2200mm VAI CM,
and three 2200 VAI FMs
N/A
N/A
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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 3
Alcoa Architectural Products provided
world class preprinted aluminum Reynolux
coil for about 300,000 square meters
National Gymnasium – 2008
Olympic Games
More 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
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Alcoa can’t wait for tomorrow!