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September 26, 2003
Alcoa Postpones Shutdown of Intalco Smelter; Uncertainty on Power Rate Clouds Plant's Future
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PITTSBURGH--(BUSINESS WIRE)--Sept. 26, 2003--Alcoa (NYSE:AA) announced today that it had postponed a final decision on curtailing production at its Ferndale, Washington ("Intalco") aluminum smelter. The Bonneville Power Administration ("BPA") has scheduled a rate hike for October 1, 2003, that would increase costs at the plant.
Elected officials and others in the region are still working to mitigate the rate increase. Given that work, the company is prepared to wait until October 15th to make a decision on the plant's future.
"Over the past few years, BPA rates have risen sharply, making the Intalco plant less competitive globally," said Bernt Reitan, President of Alcoa Primary Metals. "Given uncertainty about the rate increase, we must continue to prepare for a shut-down. But in fairness to our employees and the community, we will wait another two weeks so there is more certainty about the costs before making a decision."
Production and Energy at Intalco
Alcoa is currently running two pot-lines at the Intalco plant with approximately 110,000 metric tons per year of production. Alcoa's interim power supply agreement with BPA is scheduled to expire on September 30, 2003. In the future, Alcoa may adjust production at Intalco as market conditions warrant. Alcoa owns 61 percent of the Intalco facility with the remainder owned by a Japanese consortium.
About Alcoa
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 127,000 employees in 40 countries. For more information go to www.alcoa.com
Forward Looking Statement
Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance or achievements to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include Alcoa's inability to achieve the cost-savings for the facility, power costs, economic incentives and other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2002.
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