Alcoa 2000 Annual Report Download - page 37

Name /alcoa/4500 05/31/2001 06:17PM Plate # 0 com g 35 # 1
0099989796
Packaging and Consumer
Engineered Products
Flat-Rolled Products
Alumina and Chemicals
Primary Metals
Other
13.1 13.3
15.3 16.3
22.9
Revenues by Segment
billions of dollars
2.0
0.6
1.6
2.9
4.1
1.9
2.0
0.5
4.2
2.1
2.9
1.6
1.8
0.9
2.1
2.5
4.9
3.1
1.9
0.8
2.2
2.6
5.1
3.7
2.1
2.1
3.7
4.1
5.4
5.5
0099989796
10,644 11,048
12,938 13,273 13,968
Alumina Production
thousands of metric tons
35
I. Alumina and Chemicals
2000 1999 1998
Alumina production (mt) 13,968 13,273 12,938
Third-party alumina shipments (mt) 7,472 7,054 7,130
Third-party sales $2,108 $1,842 $1,847
Intersegment sales 1,104 925 832
Total sales $3,212 $2,767 $2,679
After-tax operating income $ 585 $ 307 $ 318
This segment’s activities include the mining of bauxite, which is
then refined into alumina. Alumina is sold to internal and external
customers worldwide or is processed into industrial chemical
products. The industrial chemical products are sold to a broad
spectrum of markets including refractories, ceramics, abrasives,
chemicals processing and other specialty applications. This segment
does not include the Reynolds alumina assets that were required
to be divested.
Alumina comprises approximately two-thirds of the total
third-party sales. In late 1999, Alcoa completed the expansion of
its Wagerup alumina refinery in Australia. This expansion, which
increased Wagerup’s capacity by 440,000 mt to a total plant capacity
of 2.2 million mt per year, was completed on time and on budget.
With the completion of this expansion and the increased production
levels at Kwinana, Pinjarra and San Ciprian, alumina shipments
increased 6% from 1999. The increase in production, along with
a 13% increase in prices, led to a 19% increase in third-party sales
of alumina in 2000 compared with 1999. In 1999, third-party sales of
alumina were up 5% compared with 1998. Shipments fell 1% while
realized prices rose 6%. Third-party sales of alumina-based chemical
products were up 2% in 2000 compared with 1999. The increase
was mainly attributable to increased volume in Alcoa’s Latin America
chemical operations. Third-party sales of alumina-based chemical
products were down 3% in 1999 from 1998, as the divestiture
of Alcoa Specialty Chemicals in 1998, lower prices and a lower
value-added mix more than offset higher shipments.
Segment
ATOI in 2000 rose 91% over 1999 due to higher alumina
prices, higher shipment volumes and continued cost reductions,
partially offset by higher energy costs. There was an increase in both
alumina and chemicals
ATOI of 95% and 23%, respectively, from
1999 to 2000. Segment ATOI for 1999 fell 3% from 1998 to $307 as
a result of lower operating income recognized on intersegment sales,
somewhat offset by cost reductions. Alumina ATOI fell 4%, while
chemicals ATOI rose13%from1998to1999.
As announced in 2000, operations at the alumina refinery located
in St. Croix, U.S. Virgin Islands, were suspended on January 31, 2001.
Additionally, in February 2001, Alcoa announced reduced operating
rates at its Pt. Comfort, Texas refinery and a complete curtailment at
its aluminum fluoride facility in Fort Meade, Florida. Future produc-
tion at St. Croix, Pt. Comfort and Ft. Meade will be evaluated in light
of internal and external supply commitments or market conditions.