Alain Belda. - FILE
PORT-OF-SPAIN (Guardian):
ALCOA'S PROPOSAL to build its controversial US$1.5 billion aluminium smelter in south-west Trinidad is part of a strategy to shift production to countries with cheaper energy and raw-material costs, international wire services reported yesterday.
Alcoa CEO Alain Belda has cut expenses by shedding jobs and closing plants in the U.S., such as a smelter in Maryland, while looking to expand production outside of the U.S. where raw-material costs are cheaper.
Alcoa is expecting aluminium production to double by 2020.
SMELTER
The company agreed to build a smelter in T&T in February, where it has secured supplies of natural gas, according to a Reuters report.
Alcoa also is building a smelter in Iceland and considering a second plant there to tap cheap geothermal power.
On Monday, Alcoa, the world's biggest aluminium maker, said its first-quarter profit more than doubled to a record US$608 million as metals prices surged. Sales rose 16 per cent to a record US$7.24 billion from US$6.22 billion. Aluminium prices were up 29 per cent on average during the quarter, reaching a 17-year high in February.
RAW-MATERIAL COSTS
"Demand remains strong in aerospace, construction, power generation," analyst Scott Burns of Morningstar Inc. said.
"All these things are going for the company. It's just a matter of whether or not they can control their rising raw-material costs."
Alcoa benefited as costs for caustic soda and natural gas, both used in aluminium production, fell compared with the previous quarter, Burns said. Costs and expenses rose 9.5 per cent to US$6.24 billion compared with a year ago, slower than the gain in sales, Alcoa said.
