Alcoa Inc (NYSE:AA) Is Changing The Way It Works


Dallas, Texas 12/12/2013 (FINANCIALSTRENDS) – Alcoa Inc (NYSE:AA) is involved in the production and the management of fabricated aluminum, primary aluminum as well as alumina combined, via the company’s  participation in mining, refining, technology, smelting and fabricating as well as recycling. The company’s products are widely used across the globe in industries like automobiles, aircraft, defense, packaging, industrial applications, building and construction and commercial transportation. 

Weathering the storms

The company has always been a giant in its field and it manages to wade through the deepest swamps no matter how the market storms batter it. Now it is manufacturing the patented Alcoa 951 bonding-process at the request of various automakers. This process is also available to the company’s rivals who are involved in supplying aluminum products to the automobile industry.

Alcoa Inc (NYSE:AA) coats aluminum in order to prevent corrosion and it also prepares the surface for the adhesives. This will go a long way in helping automobile makers produce additional structural load-bearing parts that are fabricated from aluminum. Another big aluminum supplier, Novelis says that it can utilize Alcoa 951 but that it has its very own coating. Alcoa Inc (NYSE:AA) projects that there will be a doubling in the demand for aluminum over the next 10 years.

Demand for aluminum

January will bring with it the much awaited Detroit’ North American International Auto Show. Many feel that Ford will be introducing its next generation F-150 pickup truck that has been made with extensive use of aluminum. Even currently, many vehicles like the Audi A8, Jaguar XKF and Land Rover’s Range Rover have bodies that are made entirely of aluminum.

However, most of the aluminum panels that are used in the current-day vehicles are for the trunks, hoods and other segments that are not required to bear any heavy loads. The demand from automakers is that the metal should now be produced in such a manner that it will be ideal for other structural segments that carry more weight. Kevin Lowery,  the Alcoa Inc (NYSE:AA) spokesperson said that the company does not generally share any of its proprietary technology with its rivals and that the Alcoa 951 is an exception. He said that this has been done at the specific request of the automakers though he refrained from mentioning who those automakers were.

Time for a change

Alcoa Inc (NYSE:AA)’s automotive sheet business Director, Randall Scheps, said that the 951 is an enabler that will transition from the general hang-on kind of applications onto the truly structural ones As a rule, automakers are not conducive to sticking to a single supplier for any component. This keeps competition alive and they can then bargain for lower prices.

And so, Alcoa Inc (NYSE:AA) has licensed its 951 process to a German company Chemtall that is a specialist in treating plastics, metals and chemicals. It will produce as well as sell the 951 to various suppliers of aluminum and Alcoa Inc (NYSE:AA) will receive a fee for the same. Any which way you look at it, Alcoa Inc (NYSE:AA) stands to win.