Alcoa Expands in Indiana to Capture Growing Aerospace Demand for Advanced Jet Engine Parts

Alcoa News Release:

May 29, 2014
Alcoa Expands in Indiana to Capture Growing Aerospace Demand for Advanced Jet Engine Parts
Capacity Broadens Reach into Large Commercial Jet Engine Market

• New, $100 million facility to produce nickel-based structural components for industry’s best-selling jet engines
• State-of-the-art plant to use latest in advanced manufacturing technologies including digital x-ray, 3D printing and robotics
• Expansion to create 329 new jobs by 2019
• Investment supported by customer contracts

NEW YORK & LA PORTE, Ind.--(BUSINESS WIRE)--Leading aerospace manufacturer Alcoa (NYSE: AA) today broke ground on its state-of-the-art, $100 million aerospace expansion in La Porte, Indiana 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. Engines for narrow-body aircraft are among the top selling jet engines in the world.

“Aerospace growth is soaring and Alcoa is ramping up our downstream capabilities to capture that demand,” said Alcoa Chairman and CEO Klaus Kleinfeld. “Applying our industry-leading expertise, this facility will deliver highly engineered parts our customers need to build some of the best selling engines and at high volumes.”

The plant will increase the Company’s capacity to supply engines for narrow-body aircraft. It also will enable Alcoa to produce parts nearly 60 percent larger than components it makes today, expanding its market reach to wide-body airplanes. These components are used in the compression and hot sections of the engine. Alcoa is already the global leader in jet engine airfoils.

Construction of the plant is underway and is expected to be complete by the fourth quarter of 2015. Customer contracts underpin the new capacity. The facility will use the latest in high-tech advanced manufacturing equipment, including digital x-ray for real-time quality assurance, 3D printing of prototypes, blue light technology for more comprehensive dimensional inspection data, and automated casting furnaces with advanced controls to meet precise product specifications.

Indiana Governor Mike Pence, La Porte Mayor Blair Milo, and other state and local dignitaries joined Alcoa executives, employees and community members to celebrate the expansion which will create 329 jobs by 2019.

“Hoosiers are expert builders, constructing airplane components and lifting our Indiana economy,” said Governor Pence. “Indiana-manufactured goods serve industries in all corners of the world, reaching new heights in business and, for Alcoa, in the skies. With the Hoosier State’s commitment to creating a business-friendly environment, companies are able to find the resources they need to soar in Indiana, a state that works for business.”

The Indiana Economic Development Corporation has offered Alcoa up to $4 million in conditional tax credits based on the Company’s job creation plans. In addition, the city of La Porte has approved tax incentives worth $7.1 million over a 10-year period.

“The City of La Porte is proud to celebrate this momentous occasion with the Alcoa Team,” said La Porte Mayor Blair Milo. “Over the years, La Porte and Alcoa have developed a strong partnership due to Alcoa’s industry-leading status as well as its leadership role within our community. We are excited to grow that partnership in lock step as Alcoa continues to enjoy growth and success.”

This is the second major aerospace investment by Alcoa in Indiana in two years. In 2012, Alcoa announced construction of a $90 million greenfield state-of-the-art aluminum lithium facility at its Lafayette operations. The facility is on schedule to open later this year and will be capable of producing upwards of 20,000 metric tons of Alcoa’s patented aluminum-lithium alloys used to build dramatically lighter and lower-cost airplanes versus composite alternatives.

These investments are profitably growing Alcoa’s aerospace business, which had revenues totaling $4 billion in 2013. The Company holds leading market positions in aerospace forgings, extrusions, jet engine airfoils and fastening systems and is a leading supplier of structural castings made of titanium, aluminum and nickel-based superalloys, which are produced by its downstream business, Engineered Products and Solutions (EPS). The Company also holds leading market positions in aerospace sheet and plate produced by its midstream business, Global Rolled Products (GRP). The Company’s value-add businesses, comprising EPS and GRP, accounted for 58 percent of Alcoa's first quarter 2014 revenues and 76 percent of the Company’s total segment after-tax operating income.

Alcoa in Indiana
Alcoa employs nearly 3,200 people at three operating locations in the state of Indiana: Warrick Operations, east of Evansville, Ind., with 1,925 employees; Lafayette Operations with 745 employees and Alcoa Howmet in La Porte, Ind., with 470 employees who manufacture highly engineered turbine components made of advanced nickel-based superalloys for jet engines, industrial gas turbines and other turbine-based transportation products.

Reinforcing Alcoa’s commitment to Indiana and in celebration of the expansion, the Alcoa Foundation is granting $60,000 to Ivy Tech Community College—Indiana’s largest public postsecondary institution and the nation's largest singly accredited statewide community college system serving nearly 200,000 students annually. The funds will support the launch of a nationally recognized certification program and a class on Computer Numerical Control (CNC) Programming through which students will be given core knowledge and skills needed to work in an advanced manufacturing environment. Scholarship opportunities will be available for these 8-12 week programs, which will connect students with local manufacturers looking for skilled talent.

Editor’s Note: Caption for accompanying photo: Leading aerospace manufacturer Alcoa today celebrated the start of construction of its state-of-the-art, $100 million aerospace expansion (rendering shown here) in La Porte, Indiana.

Additional resources: Go to www.alcoa.com/laporte for more information, photos and b-roll.

About Alcoa
A global leader in lightweight metals engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high-performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our 60,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visitwww.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoaand follow us on Facebook at www.facebook.com/Alcoa.