TORONTO (miningweekly.com) – US specialty metals manufacturer Alcoa has completed a second significant North American automotive expansion this year to meet rising demand for lighter materials for use in the automotive sector in the quest for increasing fuel efficiency.
Backed by long-term customer contracts, Alcoa invested $300-million in the latest Tennessee capacity expansion aimed at capturing growing demand for automotive aluminium sheet, as the use of aluminium body sheet in North American vehicles was expected to increase eleven-fold by 2025 on 2012 levels.
The plant would provide aluminium sheet to automakers that included Ford Motor Company, Fiat Chrysler Automobiles and General Motors.
“Automakers are demanding lighter, stronger materials that improve the performance of their vehicles and Alcoa is at the forefront of capturing that demand. Through our capacity expansions in Tennessee and Davenport, and breakthrough technologies like the Micromill, we have cemented Alcoa’s position as the premier partner to the automotive industry as it turns to aluminium,” Alcoa chairperson and CEO Klaus Kleinfeld points out.
The Tennessee project started customer shipments earlier this month, augmenting Alcoa’s Davenport, Iowa-based plant that had reported record volumes of automotive sheet shipments in the second quarter, up by about 200% from the second quarter of 2014.
According to Ducker Worldwide, the amount of aluminium body sheet content in North American vehicles was expected to triple from 2012 to 2015. Alcoa estimated that it would grow its automotive sheet revenue about six fold, from $229-million in 2013 to $1.3-billion in 2018.
The Tennessee facility was equipped with rolling-mill technology that allowed it to switch production depending on changing market demand, moving between automotive and can sheet production. The location also featured a large recycling facility for automotive scrap that offset expense, eliminated waste for automakers, lowered operational cost and reduced Alcoa’s carbon footprint.
The expansion created about 200 full-time jobs.
The opening of the Tennessee facility followed Alcoa’s recent announcement that it was commercialising its breakthrough Micromill technology. Ford and Alcoa last week announced that the automaker would debut Micromill material on its 2016 Ford F-150 truck. The companies also agreed to collaborate on next-generation Micromill aluminium alloys for automotive parts.
Separately, Alcoa and Danieli Group had entered into a letter of intent to work toward an agreement to sell Micromill equipment and license the patented technology to potential customers worldwide.