June 29, 2012

Alcoa announces result of Point Henry smelter review

Alcoa announced today that it expects to operate the Point Henry aluminium smelter until at least mid 2014. The future of the smelter in Geelong, Victoria, has been under review since February because of continuing difficult economic conditions for the aluminium smelting industry in Australia.
 
“When the review was announced, the Point Henry smelter was facing substantial losses,” said Alan Cransberg, Alcoa of Australia Managing Director.
 
“Since then global market conditions, such as exchange rates and the aluminium price, have made the situation worse.
 
“However thanks to the efforts of our workforce, and the support we have received from both the Australian and Victorian governments, unions, contractors and suppliers, we believe we can minimise those losses.”
 
Mr Cransberg said the resilience and commitment shown by everyone at Point Henry over the last five months has been outstanding. 
 
“It’s been a difficult and uncertain time for our people and they have not only ensured that the smelter has run smoothly, they have done it safely and with a resolve that makes us all proud.
 
“We set a challenge to find significant savings.  We now need to implement the opportunities identified along with some structural changes that will see workforce reductions of about 10 percent – wherever possible these reductions will be voluntary.
 
“These savings and the government assistance are essential in the face of continuing tough economic conditions.  The low metal price and high Australian dollar will continue to be a significant challenge for us, but we can now focus on finding more savings and continue investing in repairs and maintenance so the smelter remains a safe and efficient workplace.
 
“The way things are right now, two years is a long time in our industry.  No one can predict exactly what’s going to happen with the global economy or where exchange rates and the price of aluminium will move,” he said. 
 
Alcoa remains confident of continuing strong demand for aluminium in the long term.
 
Mr Cransberg said the announcement is a positive outcome for employees, their families and the local community.  The Point Henry operations put over $300 million a year into the Australian economy, including over $100 million into Geelong and surrounding areas through wages, salaries and the purchase of goods and services.
 
 
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Media contact:
Nichola Holgate 0409 036 948 or nichola.holgate@alcoa.com.au