23 OCTOBER 2013http://ustrademedia.com
Ma’aden-Alcoa management expects it to bring the potline back into the operations by H1 2014
Edited by : AL CIRCLE
2 min read
Alcoa Inc is one of the global players engaged in the production of alumina, primary aluminium, and fabricated aluminium. It has a presence in mining, refining, smelting, fabricating, and recycling.
The company recently announced that the smelter operated by the joint venture (Ma’aden-Alcoa) has been shut down temporarily as one of the two potlines was facing problems during ramp-up. Alcoa owns 25 % stake in the joint venture, while the remnant is being held by Ma’aden. Management stated that repairs & maintenance works at the $10.8 billion project in Saudi could extend into coming year and the company would focus on another potline for ramping up its production. The combined capacity of both these potlines stands at 740,000 TPA. Apart from this, the rest of the operation expansion or ramp up remains on schedule.
It is the normal phenomena to face issues while ramping up the capacity. But this outage occurs at critical time, when the company shifts its primary aluminium production to the Middle East to enjoy the fuel benefits. If the ramp up would have happened as per the schedule, the company would have been in a better position to enjoy the benefit of the production curtailment by high cost producers in North America and Europe.
It is to be believed that the Saudi project is very important to Alcoa profitability, not because of its capacity, but due to better operating efficiency. The Saudi project is estimated to be the one of the lowest cost smelter operations globally. The company is trying to ramp up the production by 2014 as the industry drives to curtail production.
Though the disruption in ramp up does not derail the overall benefit, management expects it to bring the potline back into the operations between the 1Q and 2Q of 2014. Ramping up production at the Saudi facility will help the company to manage their input costs and improve the profitability, given its low cost structure backed by lower fuel cost.
The company recently announced that the smelter operated by the joint venture (Ma’aden-Alcoa) has been shut down temporarily as one of the two potlines was facing problems during ramp-up. Alcoa owns 25 % stake in the joint venture, while the remnant is being held by Ma’aden. Management stated that repairs & maintenance works at the $10.8 billion project in Saudi could extend into coming year and the company would focus on another potline for ramping up its production. The combined capacity of both these potlines stands at 740,000 TPA. Apart from this, the rest of the operation expansion or ramp up remains on schedule.
It is the normal phenomena to face issues while ramping up the capacity. But this outage occurs at critical time, when the company shifts its primary aluminium production to the Middle East to enjoy the fuel benefits. If the ramp up would have happened as per the schedule, the company would have been in a better position to enjoy the benefit of the production curtailment by high cost producers in North America and Europe.
It is to be believed that the Saudi project is very important to Alcoa profitability, not because of its capacity, but due to better operating efficiency. The Saudi project is estimated to be the one of the lowest cost smelter operations globally. The company is trying to ramp up the production by 2014 as the industry drives to curtail production.
Though the disruption in ramp up does not derail the overall benefit, management expects it to bring the potline back into the operations between the 1Q and 2Q of 2014. Ramping up production at the Saudi facility will help the company to manage their input costs and improve the profitability, given its low cost structure backed by lower fuel cost.
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