Alcoa and China: Partners in Growth Bernt Reitan Executive Vice President, Alcoa Alcoa at a glance Leading aluminum products company Primary aluminum and alumina Flat-rolled aluminum and hard-alloy extrusions Active in all major segments of the industry: Technology Smelting Mining Fabricating Refining Recycling Products serving the aerospace, automotive, commercial transportation, packaging, building and construction, and industrial markets. 2 Financial performance - 2008
Total Revenue: $26.9 Billion 2008 3rd Party Revenue by Segment Flat Rolled 2008 ATOI by Segment Engineered Solutions 36% Packaging & Consumer Alumina Flat Rolled Engineered Solutions 21% Primary Metals 30% Primary Metals
Alumina 11% 2% Packaging & Consumer 3 Global organization Other Americas, 6% Pacific, 15% United States, 53% 34 Countries 87,000 Employees Europe, 26% 4
Alcoa Primary Operations North America: Smelting 2.8M tonnes Refining 2.3M tonnes Europe: Smelting 0.6M tonnes Refining 1.3M tonnes Key Facts (2003):Key KeyFacts Facts(2008) (2005) 27 smelters on 5 continents 9 refineries on 4 continents 25 Smelters on 5 26 Smelters on continents 5
continents 9 refineries on 4 9continents refineries on 4 continents 4.0 mmt Aluminum Production Aluminum 3.6 15.3 mmt mmt Alumina 4.0 mmt Aluminum Production production 23% of of 11% world output Capacity 13% of world output worlds metal Latin America:
Smelting 0.3M tonnes Refining 2.6M tonnes Australia: Smelting 0.4M tonnes Refining 7.8M tonnes Refinery Smelter Stand-alone bauxite mine $10.9 billion in 3rd Party 14.6 mmt Alumina Revenue 24% of 14.0 mmt of aluminaproduction $17.6 billion total Revenue output including - 24% of worlds world intercompany sales to capacity downstream $6.8
billionoperations in 3rd Party Revenue $5.2 billion in 3rd Party Revenue 5 Sustainable aluminum production Sustainable energy production Energy conservation Emissions management Sustainable repowering Sustainable capacity growth 6 Leader in sustainable energy More than a century of hydropower expertise
new technology improving yield of existing projects LIHI certification Cogeneration at Wagerup and Pinjarra Sustainable biofuels for plant equipment Green Power renewable energy contracts Geothermal Calderwood dam, Tennessee Under consideration for proposed second smelter in Iceland Pinjarra cogeneration plant 7 Sustainable growth in Iceland Alcoa Fjardaal 344,000 mtpy capacity Compliant with
Icelands stringent environmental requirements North Iceland Possible second smelter site in Bakki Phase 2 feasibility study Geothermal power under consideration First shipment of alumina, Alcoa Fjardaal, Iceland 28 March 2007 8 Sustainable growth: Greenland MOU signed May 2007 340,000 mtpy greenfield smelter Hydropower system Infrastructure On line 2014 9
A values-driven company Integrity Environment, Health and Safety Customer Excellence People Profitability Accountability 10 Committed to sustainability 2020 Strategic framework
11 Land stewardship Reclamation Conservation/biodiversity Management Award-winning forest restoration, Australia Alcoa-sponsored environmental parks, Brazil Great Smoky Mountains conservation agreement, USA 12 Safety leader Alcoa facilities worldwide are 10 times safer than U.S average 76% of Alcoa facilities had zero lost workdays in 2008
Lost Workday Rate 3.50 Alcoa 3.00 US Manufacturing 2.50 2.00 1.50 1.00 0.50 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 13 Community support Commitment to Communities - 2007 Alcoa and Alcoa Foundation investments totaled $49 million More than 634,000 volunteer work hours $8 million for climate change projects
$1 million for recycling projects Qinglong Alcoa Hope School Grand Opening -- 2005 14 Energy conservation: recycling mt 1000 800 600 400 200 0 2005 2006 2007 Growth in recycled content -- 2005-2007 Currently Alcoa uses nearly 900,000 mt/year of recycled aluminum
nearly 25% of primary production Scrap recycling center, Hungary 15 Recognition Sustainability Most Sustainable Corporation / World Economic Forum in Davos Dow Jones Sustainability Index Climate Change Founding Reporter of the Climate Registry Top Green Company BusinessWeek and the Climate Group Low Carbon Pioneer CNBC European Business Best in Class Carbon Disclosure Project Leader in climate change and governance CERES Carbon Disclosure Leadership Index 2008 16 Alcoa: a Partner in Chinas Growth Alcoas History in China 1980s
CNNC* Technology relationship established 1993 Beijing Established representative office 1994 Tianjin Closures business 1995 Shanghai Aluminum foil Joint Venture 1996 CNNC*
30-year alumina supply contract Kunming Aluminum foil Joint Venture 1997 Qinhuangdao Formed original Bohai cold mill and extrusion Joint Venture 1999 Qingdao Alumina chemicals plant 2001 Chinalco Support of Chinalco reform program purchased 8% interest in successful Chalco IPO 2002
Pingguo Submitted JFS for Joint Venture to NDRC for approval 2003 Shanghai Expanded Foil Joint Venture 2004 Bohai Submitted pre-feasibility study for hot mill Chalco Further investment to maintain 8% stake Guangxi Investigated direct investment in power assets Hangzhou
Formed closures business Shanghai Acquired remaining 40% of Foil Joint Venture and established warehousing facility Bohai NDRC approval granted for Joint Venture restructuring Qinghuangdao Inaugurated Bohai Joint Venture with China International Trust & Investment (CITIC) 2006 Kunshan Acquired 70% stake in brazing sheet Joint Venture 2007 Bohai Construction of new hotmill on-track for 2009
2008 Chinaclo Investment partner with Chinalco in Rio Tinto 2005 Yutong Bus * Now Sino Metals Strategic partnership with Yutong Bus Co. Our pace is Accelerating 18 Overview ALCOAS ASSETS AND LOCATIONS IN CHINA 13 locations 1926 employees Headquarters - Beijing Sheet and Foil* - Bohai
Shared Service - Bohai Fasteners - Suzhou Guanlu Fasteners - Shanghai Foil Shanghai* Shared Service - Shanghai Corporate and Offices Flat Rolled Products Locations Other Alcoa Locations Foil Kunming* Not operated directly by Alcoa Brazing Sheet - Kunshan AEES Shanghai* Sales - Shanghai Sourcing - Shanghai Sales - Guangzhou Hainan Sales
Hong Kong * Foil and AEES operations are scheduled for divestiture in 2009 19 Investing in Chinas growth $700 million invested since 1993 $1 billion planned by 2010 Alcoa will be one of Chinas top 10 investors Member of China Association of Enterprises with Foreign Investment (CAEFI) 20 Major Alcoa China Facilities Alcoa Bohai Aluminum Co. Alcoa Kunshan AFS Suzhou
FRP: incl. finstock, beer wrap, cable warp, household foil, standard sheet, etc. Brazing sheet for HVAC, common-alloy sheet Aerospace fastening systems, fasteners for commercial transportation, rail & car applications Recent activity: Construction of the hot mill is underway Key equipments include one 1+3 2250mm HM, one 2200mm VAI CM, and three 2200 VAI FMs
N/A N/A 21 Living Alcoas Values in China Member of China Business Council for Sustainable Development (CBSD) More than $2.2 million in community investments since 2003 Hundreds of volunteers in Alcoas annual Month of Service Education Conservation Community Service Health Alain Belda honored by Asia Society for Environmental Leadership Bohai rolling mill 22
Alcoa Partnerships for Sustainability in China Zhengzhou Yutong Bus World-class structural design, materials and manufacturing technologies A new generation of energy-efficient, environmentally-friendly buses for Chinas growing commuting public. Up to 46% lighter bus body Beijing Public Transport Holdings Ltd. Alcoa Wheels used since 2007. 2.5% fuel savings 18.1% longer tire life Alcoa wheels chosen for fleet of 50 electric buses for 2008 Beijing Olympic Games 23 Partnerships for progress Beijing International Airport Terminal 3 Alcoa Architectural Products provided world class preprinted aluminum Reynolux coil for about 300,000 square meters National Gymnasium 2008 Olympic Games
More than 29,000 square meters of Alcoa Architectural Products Reynolux coil coated aluminum sheet 24 Alcoa: a Dependable Partner for a Sustainable Future Nearly three decades in China World leader in aluminum technology and sustainability Engaged with our communities throughout China Contributing to Chinas growth Dedicated to Chinas Future 500,000 safe hours at Bohai. -- January 2007 25 Alcoa cant wait for tomorrow!
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