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January 10, 2006

Alcoa Flexible Packaging Optimizing Custom Thermoforming Operations in Pharma, Medical Packaging Center of Excellence; To Expand Downingtown Plant To Further Serve Food, Retail, Pharmaceutical and Medical Markets

PITTSBURGH--(BUSINESS WIRE)--Jan. 10, 2006--Alcoa Flexible Packaging (AFP), a packaging and consumer business unit within Alcoa Inc. (NYSE:AA), announced today that it will consolidate its custom thermoforming operations into a new pharmaceutical and medical packaging center of excellence at its Downingtown, PA location, furthering AFP's position to serve customers in the food, retail, pharmaceutical and medical markets. Existing medical thermoforming operations will be relocated from Wheaton, IL and Cumberland, RI and those facilities will be closed.

"Consolidating the majority of our custom thermoforming equipment in one location positions us to grow our existing medical and retail packaging business and better serve customers in all of our markets," said Bimal Kalvani, Alcoa Flexible Packaging president. "This move will allow Alcoa to invest in a new, medical packaging industry standard Class 100,000 Clean Room within a plant that already has an established track record servicing the pharmaceutical community as well as other key markets," Kalvani added.

"The decision to close any operation is difficult," said Kalvani. "However, concentrating our existing custom thermoforming capabilities within the Northeastern corridor -- in a facility that has the necessary disciplines associated with manufacturing pharmaceutical and medical packaging -- will allow us to serve our customer base and remain an industry leader in service and innovation."

Consolidation of the thermoforming operations will affect 120 employees in Illinois and 72 in Rhode Island. The Downingtown, PA facility will add 140 employees to operate the relocated equipment, bringing total employment there to approximately 340. Production at both Wheaton and Cumberland will continue into the second quarter of 2006 to ensure that all existing customers' needs are met during relocation of the thermoforming equipment. Downingtown's custom thermoforming clean room is slated for full operation by the end of the same quarter. Costs of the closures and consolidation were included in the company's third quarter 2005 restructuring announcement.

As part of the growth initiative, the Downingtown packaging facility will host the business unit's technical thermoforming processes in a newly constructed Class 100,000 clean room environment. Because Alcoa's custom thermoformed medical packaging is utilized for medical devices, surgical kits, surgical and medical procedure trays, diagnostic kits and implant trays, the Class 100,000 Clean Room ensures that the strictest cleanliness processing methods are available when manufacturing packaging for these types of medical products.

The Downingtown Packaging Plant will continue to build on its experience as a major pharmaceutical packaging operation for approximately two decades, providing printed blister lidding material for many major pharmaceutical drug manufacturers. The Downingtown operation also will continue to be a major supplier of printed shrink sleeves, confectionery and other food-related packaging.

About Alcoa Flexible Packaging

Alcoa Flexible Packaging, based in Richmond, Virginia, manufactures a variety of packaging materials including extrusion and adhesive laminated pouch materials, over wraps and liner stock, blister lidding foil, thermoformed trays, cable wrap, plastic shrink sleeve body labels, shrink film and laminated foil. These packaging materials serve the world's leading consumer products manufacturers within the pharmaceutical, medical, food & beverage, and retail markets.

About Alcoa Inc.

Alcoa is the world's leading producer of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses as a single solution to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, precision castings, and electrical distribution systems for cars and trucks. The company has 129,000 employees in 42 countries.