Alcoa 2014 Annual Report Download - page 37

Alcoa completed the acquisition of Firth Rixson, a global leader in aerospace jet engine components, in fourth quarter
2014. In addition to manufacturing jet engine rings, Firth Rixson manufactures a full range of forged complex shapes
and is a supplier of integrated nickel ingot. Firth Rixson has five locations in the United States (Rochester, NY;
Fontana, CA; Rancho Cucamonga, CA; Verdi, NV, and Savannah, GA) and eight locations outside of the United States
(United Kingdom, Hungary and China).
In December 2014, Alcoa announced a definitive agreement to acquire TITAL, a privately held company based in
Germany. TITAL is a leader in titanium and aluminum structural castings for aircraft engines and airframes. In
addition, TITAL is a leader in process technology. The deal is expected to close in first quarter 2015.
Also in December 2014, Alcoa announced plans to double its high-technology coating capacity at its Whitehall,
Michigan facility. The $17 million investment will position the Company to further capture growing demand for
advanced jet engine parts. In 2014, Alcoa commenced an expansion at its Hampton, Virginia facility to create the
capability to employ a new process technology that improves jet engine blades. This $25 million investment will add
equipment for a new production line and modify existing machinery to produce the blades. It is expected to be
complete by the fourth quarter of 2015.
In 2014, Alcoa completed construction of a $100 million greenfield facility adjacent to its Lafayette, Indiana plant,
which expands Alcoa’s aluminum lithium capabilities. The facility can produce more than 20,000 mt of aluminum
lithium and is capable of casting round and rectangular ingot for rolled, extruded, and forged applications. Alcoa
completed expanding aluminum lithium production at its Technical Center in Alcoa Center, PA in the third quarter of
2012. In June 2013, Alcoa also completed its expansion at its Kitts Green plant in the United Kingdom, creating
additional aluminum lithium casting capacity.
Also in 2014, Alcoa broke ground on its $100 million aerospace expansion at its La Porte, Indiana facility where it will
produce nickel-based superalloy jet engine parts. The new 320,000-square-foot facility will expand Alcoa’s reach from
structural engine components for business and regional jets to large commercial aircraft, including narrow- and wide-
body and military airplanes. Construction is expected to be complete by the fourth quarter of 2015.
Alcoa invested $13 million to expand its wheel manufacturing plant in Europe, to meet growing demand for its
lightweight, durable, low-maintenance aluminum truck wheels. Construction on the production line expansion began in
January 2014, and was completed on schedule in January 2015.
Alcoa and VSMPO-AVISMA Corporation signed a cooperation agreement in October 2013, which will allow the
companies to meet growing demand for high-end titanium and aluminum products for aircraft manufacturers
worldwide. Once operational, the new joint venture will focus on manufacturing high-end aerospace products, such as
landing gear and forged wing components, at Alcoa’s plant in Samara, Russia. The definitive Shareholders’ Agreement
was executed by the parties on July 16, 2014, and the deal is expected to close in 2015, with the joint venture expected
to become operational in 2016.
As discussed above, the joint venture between Alcoa and CPI, which the parties created in November 2012 to produce
high-end fabricated aluminum products in China, is currently suspended.
In July 2014, Alcoa announced a 10-year, $1.1 billion agreement with Pratt & Whitney, a division of United
Technologies Corp., for state-of-the-art jet engine components.
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