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Message from the President
2008, a key year for our future
In March 2008, we announced the signature of an agreement with the Government of Québec for the modernization of the Baie-Comeau Smelter, the renewal of our energy supply contracts, the availability of blocks of energy for future expansion projects, and the continuation of discussions regarding the expansion of the Deschambault Smelter. With this agreement, our growth and wealth creation plan for Québec was sealed, and confirmed by supply contracts signed with Hydro-Québec in December 2008.
Between these two milestone events, the financial crisis took hold. The aluminum industry was heavily impacted, with the price of our metal losing more than 60% of its market value in less than six months. It was in this particularly difficult economic context that we headed into 2009 with a commitment to step up our efforts to reach the targets that we set in each of the three areas of sustainable growth.
Environment
We signed three important agreements in 2008 that structure our environmental initiatives. One agreement with the Government of Québec relates to our environmental performance, while another renews our commitment to voluntarily reduce our GHG emissions for the 2008-2012 period after exceeding the targets of the last agreement. The third agreement, with Environment Canada, covers polycyclic aromatic hydrocarbons (PAH) emissions at the Baie-Comeau Smelter.
In 2008, we aimed to reduce the amount of waste landfilled by 50% compared to 2000. This was very nearly achieved, with a reduction of 49%, mainly attributable to the significant progress made at the Baie-Comeau and Bécancour smelters, where we are well on our way to achieving the even more ambitious goal set for 2009: a 60% reduction.
By achieving energy savings of 349 GWh, we surpassed our 2008 target of 65 GWh by more than five times. The Bécancour and Deschambault Smelters delivered exceptional performances that paved the way for their initiation into the Hydro-Québec Écolectrique network. We continue in our efforts to direct the maximum amount of energy towards aluminum production. As for our use of industrial and potable water, the current economic context has forced us to postpone the implementation of a new action plan designed to help further reduce our consumption.
In the area of air emissions, the Baie-Comeau Smelter’s prebake plant became a worldwide benchmark within Alcoa in 2008 for its low GHG emissions related to anodic effects. The performance of the smelter’s Söderberg plant leaves to be desired, however, and we continue our efforts to improve the situation until this technology has been entirely replaced as part of the modernization.
Social commitment
We are committed to contributing to the well-being of our employees and the communities where we live and work. Providing a healthy and safe working environment is a top priority for us, a fact that becomes apparent when you look at the significant decrease in recordable injuries during recent years. Although good results were achieved in 2008, we were unfortunately unable to maintain this trend. Our call to vigilance and the various measures we have implemented are aimed at duplicating – or even improving upon – the exceptional performance recorded in 2007.
We maintained, and actually slightly increased, the financial support provided by the Alcoa Foundation and Alcoa Canada to the communities where we operate to help local organizations respond to increased demand for their services. Alcoa employees get personally involved in the communities where they live and work, as demonstrated by their increased participation in our volunteer support programs.
Economic development
Our activities resulted in economic spin-offs of more than $1.6 billion in Québec in 2008. To this we can add the Baie-Comeau Smelter modernization project, which represents an investment of $1.2 billion between now and 2015. This project is already underway. At the end of 2008, in response to the weak global demand for aluminum, we decided to dismantle one of the Söderberg pot rooms sooner than planned. This initiative helped us maintain employment levels by reassigning a number of workers to this task.
In conjunction with the modernization project, we announced the creation of a $5 million Heritage Fund. Over the next few years, economic and social decision-makers in the Baie-Comeau region will be invited to participate in the program to respond to workforce requirements and try to halt – or even reverse – the exodus of the younger generation from the area.
In June 2008, we announced the creation of Alcoa Innovation to provide a framework for our efforts to promote the use and processing of aluminum in Québec. One of its first initiatives, the “Aluminum Innovates at Home†design competition, was a great success both in terms of the quantity and quality of the entries received.
Acknowledgements
The fact that we have achieved a measure of success despite the economic challenges we have faced since the fall of 2008 is attributable entirely to our employees, who spared no effort; to our suppliers who adapted to our reality; to the Government of Québec, which acted swiftly in taking efficient measures to help us maintain our operations; and to the municipalities in which we operate, particularly Baie-Comeau, which has remained a true partner.
In fact, they are all valued and respected partners. Their commitment enables us to fully realize our role in creating wealth and supporting the communities where we operate. We thank all of them.
Jean-Pierre Gilardeau
President, Alcoa Canada
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