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January 31, 2001

Alcoa Sets Challenge For 2003

PITTSBURGH, Pa.--January 31, 2001-- At a meeting with analysts and investors today, Alain Belda, Chairman and Chief Executive Officer of Alcoa Inc., outlined the company's 2003 challenge. Like the previous challenge, the new challenge relies on the principles of the Alcoa Business System and continued profitable growth. Alcoa aspires to be one of the premier performing industrial companies, and one of the key components to achieving that performance is a new cost-reduction target of $1.0 billion to be achieved over the next three years. This follows the company's successful completion in December 2000 of a similar program initiated in 1998 to eliminate $1.1 billion in costs.

"The new goal to reduce costs by $1.0 billion by December 2003 will come -- as did our 2000 program - through our employees' continued implementation of ABS, the Alcoa Business System, our universal management system that increases the productivity of all of our businesses and allows us to integrate acquisitions rapidly. The continual focus of Alcoa employees worldwide on the productivity of assets and the elimination of waste is the heart of the company's operating discipline, applicable in all economic environments," said Mr. Belda. "Moreover, this is part of the ABS process which eliminates waste; this is not a people-reduction initiative.

"The relentless application of ABS will enable Alcoa to become one of the most productive industrial companies in the world, able to provide customers with what they need, when they need it, making us partners in their cost reduction and efficiency drives. It is an important driver of our financial performance," concluded Mr. Belda. For the year 2000, Alcoa reported record net income of $1.484 billion, or $1.80 per share, up 41% from $1.054 billion, or $1.41 per share, for 1999. Revenues were a record $22.9 billion, compared with $16.3 billion for 1999.

Alcoa is the world's largest producer of primary aluminum, fabricated aluminum, and alumina and participates in all segments of the industry: mining, refining, smelting, fabricating and recycling. Alcoa serves customers worldwide in the packaging, consumer, automotive and transportation, aerospace, building and construction, industrial products and distribution markets. Related Alcoa businesses include packaging machinery, vinyl siding, plastic bottles and closures, electrical distribution systems for cars and trucks, and fiber optic cable. The company has operations in 36 countries.

Alcoa Inc. (NYSE: AA)

Editor's Note: The Alcoa Business System (ABS) is an integrated set of business systems and tools organized to achieve our mission, values, strategies and objectives. It is a transportable philosophy of management, manufacturing organization, shared services, technology platforms and compensation systems. It is respectful of, and dependent on, Alcoans' capabilities by integrating their knowledge and experiences in our day-to-day operations. Synergies are globally maximized through a common management system, a common industrial language and an unencumbered transfer of knowledge across businesses and geographies. It focuses on serving customer demand by emphasizing the elimination of all waste and making to use.

Some of the statements in this release are forward-looking. Actual results may differ materially from those projected. Factors such as changes in economic conditions in the markets we serve or other factors discussed in our latest quarterly and annual reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those expressed in this release.

Editorial Contact:
Joyce A. Saltzman
412 553 4467

Investor Relations:
Charles D. McLane
412 553 2231