Alcoa Inc. (AA), the largest U.S. aluminum producer and Becema, a leading Russian producer of tanks and semi-trailers, launched a new lightweight aluminum cement hauler for the Russian transportation market.
The eco-friendly trailers were manufactured using Alcoa's new aluminium sheet alloy 1565M. By using this, the weight of the tank body was reduced by 25-30% over base aluminium alloys.
As per Alcoa, the weight has been reduced 300% versus a steel tank, saving approximately 2,600kg or more than 2 tonnes per tank. Lower weight and high strength from aluminium help save transport and fuel costs.
Owing to their light weight, the aluminium trailers provide greater payload. This enables Becema to meet government weight requirements.
Aluminum’s other advantages include improved corrosion resistance and durability, which results in fewer repairs and longer life of the vehicle, and recyclability.
In July 2011, Alcoa Inc. reported its second quarter 2011 results. The company reported adjusted earnings per share of $0.32, missing the Zacks Consensus Estimate of $0.34.
Revenues for the quarter were up 27% year over year to $6.585 billion, outpacing the Zacks Consensus Estimate of $6.434 billion. The increase was due in part to higher alumina shipments, and higher realized pricing for both alumina and aluminum.
The company posted improved profits across all its segments. This was made possible by a revenue growth of 13% in packaging, 6% in aerospace, 12% in building and construction, 16% in commercial transportation, 9% in industrial products, 8% in industrial gas turbines and 5% in automotive.
The company’s adjusted EBITDA of $1.04 billion was up 44% year over year.
Alcoa reaffirmed its forecast for a 12% growth in global aluminum demand in 2011. Looking ahead, Alcoa projects continued growth in all major end-markets on a global basis, including Aerospace (7%), Automotive (4%-8%), Commercial Transportation (7%-12%), Packaging (2%-3%), Building and Construction (1%-3%), and Industrial Gas Turbines (5%-10%).
For the year, Alcoa projects aluminum demand to grow 12% on top of the 13% growth witnessed in 2010. Alcoa projects that from a 2010 baseline, aluminum demand would double by 2020 at a 6.5% annual growth.
Alcoa Inc., a Pennsylvania-based corporation, is among the world’s leading producers of primary and fabricated aluminum and alumina. It involves the technology of mining, refining, smelting, fabricating and recycling of aluminum. We believe that Alcoa’s cost reduction efforts are, to some extent, offsetting the negative impact of higher energy and raw material costs on profitability.
The company is divesting underperforming assets through its restructuring program. The annual global consumption of aluminum products, both upstream and downstream, is expected to double by 2020. This consumption boom will be driven primarily by growth in China, India, Russia and Brazil, whose demographics are accelerating development.
Currently, Alcoa has a short-term (1 to 3 months) Zacks #4 Sell rating and a long-term (6 months) Neutral recommendation.
Alcoa faces stiff competition from Aluminum Corporation Of China Limited (ACH), Rio Tinto Plc. (RIO) and BHP Billiton Ltd. (BHP).
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