Alcoa 2004 Annual Report Download - page 20

News’04
18
• Alcoa Aluminio S.A.
sold Itaipava, its flexible
packaging business, to
Latin American-based
Dixie Toga.
• Alcoa World Alumina
and Chemicals sold Alcoa
Specialty Chemicals to two
private equity firms led by
Rhone Capital LLC.
• Alcoa sold its U.S.
Russellville (AR) and St.
Louis (MO) aluminum foil
plants to JW Aluminum.
Know the Market
By leveraging its known
product quality and Alcoa
brand strength with original
equipment manufacturers
(OEMs) and implementing
ABS principles to change its
manufacturing processes,
Alcoa Wheel Products
(AWP) enhanced its position
in the growing market for
customized wheels and
achieved production mile-
stones. Specialty Wheels
reduced time-to-market
from the industry average
of 38 weeks to as little as
five weeks. The business
also launched 41 new wheel
programs, greatly outpacing
their historical six to eight.
AWP increased its revenue
and profits and benefited
OEMs with enhanced
original purchase and
aftermarket sales.
Carefree Travel
Applying knowledge gained
from supplying the automo-
tive and heavy truck markets,
AFL helped motor home
manufacturer Fleetwood
design electrical systems to
meet the specific needs of
motor home buyers. This
is the first time AFL has
supplied wire harnesses for
Fleetwood diesel vehicles,
creating an opportunity to
use ABS tools to design the
assembly line for the product.
AFL’s Acuña, Mexico, plant
successfully introduced
make-to-use product assem-
bly, with smaller lot size
production, reduced lead
times, and rapid changeovers.
That’s Delivering!
Via ABS, the Alcoa Mill
Products (AMP) Texarkana
(TX) plant raised its on-time
delivery performance from
56% in 2003 to 94% at year-
end 2004. This achievement
was enabled by plantwide
employee involvement that
resulted in more effective
links between functional
areas and dramatic improve-
ments in reliability at critical
production centers. For
example, improved produc-
tion planning connections
to the shop floor ensured
that task dates were met, and
kaizen events and problem
solving to root cause raised
some key reliability factors
by double-digit percentages.
Customers responded
strongly. AMP gained multi-
year supply agreements
with strategic customers for
2005 and beyond, and
grew its share of the painted
products market.
Value Selling
Using ABS to focus on
specific customer benefits,
Alcoa CSI Argentina achieved
a 3% growth in market share
– an 11% increase over its
business plan – and also
added an important new
source of revenue. The busi-
ness concentrated on 100%
product quality, established
pull systems with customers,
and shortened lead time –
resulting in reliable delivery
and an average 30% reduc-
tion in customer-held
inventories.
Acquisitions and Divestitures
• Alcoa and BHP Billiton
sold their respective equity
interests in Integris Metals,
a metals service center
company, to Ryerson Tull.
• Alcoa and Fujikura Ltd.
signed a letter of intent in
which Alcoa will obtain
complete ownership of the
AFL Automotive business
and Fujikura will obtain
complete ownership of the
AFL Telecommunications
business. The transaction
should be completed by
spring 2005.
New ACC-U-BAR
Alcoa Engineered Products,
Cressona (PA) added
ACC-U-BAR, a premium,
high-performance extruded
bar product, to its branded
bar line. The new product
features superior machinability
and straightness, suitable
for applications that require
tighter tolerances and reduced
twist. Sales already have
exceeded expectations.
Sustainable Power
Following an agreement
with stakeholders that inte-
grates strict environmental
and social goals with long-
term economic development,
the Brazilian government
allowed BAESA, a consor-
tium of Alcoa Aluminio and
four other Brazilian-based
businesses, to proceed with
its Barra Grande hydroelec-
tric project. Under terms
of the agreement, BAESA
will increase its investment in
various forms of community
support to $51 million and
its investment in environmen-
tal activities to $30 million.
Now with 95% of the civil
construction completed, the
Barra Grande facility will
have a capacity of 690 MW,
generating 30% of the elec-
tricity demand in the Santa
Catarina state and the state
of Rio Grande do Sul. As part
of the Company’s sustainable
development practices, Alcoa
continues to work with both
those who favor and those
who oppose the project in
formal and informal venues.
Fábio M. Almeida,
Itajubá, Brazil
Planting trees in Soest, Germany