Train wreck du jour: Alcan shuts down 3% of their global aluminum production, citing "energy efficiency" and "weak USD" issues.
Alcan To Halt Production At Its 60-Year-Old Jonquiere Soderberg Aluminum Smelter in Quebec
Thursday January 22, 1:58 pm ET
MONTREAL, Quebec, Jan. 22 /PRNewswire-FirstCall/ - Alcan Inc. (NYSE, TSX: AL - News News) today announced that it will permanently halt production at its 60-year- old Jonquiere Soderberg primary aluminum facility in Saguenay, Quebec, by the second quarter of 2004.
"Closing a plant is never an easy decision, but as a corporation dedicated to economic and environmental sustainability, we must make the decisions that are required to be both environmentally responsible and protect Alcan's competitive position globally. Despite our successful efforts over the years to bring the Jonquiere Soderberg lines up to today's environmental and technological standards, the reality is that this technology has a limited life span," said Travis Engen, President and CEO of Alcan Inc.
Compared to the other Alcan smelters in Quebec, the Jonquiere Soderberg plant has the highest production costs and faces the greatest environmental challenges. It is also one of the least energy efficient. The increase in the value of the Canadian dollar compared to the US currency over the last year contributed to this decision. This currency increase has been greater than the recent rise in the aluminum market price.
The Company plans to close the four Soderberg potlines between February and April 2004. The shutdown will affect 90 kt per year of production capacity, which represents three per cent of Alcan's global production capacity. The remaining 163kt of pre-bake smelting technology capacity in Jonquiere will not be affected.
The normal employee turnover in the next two years provides a window of opportunity allowing Alcan to reduce the impact of the decision on employees. The closure will directly impact approximately 550 jobs in total. "Alcan's priority is to take care of the employees. Our local leadership team will work closely with the appropriate employee representatives to ensure that there will not be any layoffs and minimize impacts on our employees," said Cynthia Carroll, President and CEO of Alcan Primary Metal group.
"The closure of the Jonquiere Soderberg lines reinforces the importance of continuing to work on sustainable and value creating economic development projects in the region. Alcan is committed to work even more actively with government and private sector organizations to support opportunities for job creation," added Cynthia Carroll. In 2003 alone, Alcan and its partners were involved in initiatives that will create over 600 jobs in the Saguenay-Lac- Saint-Jean region.
Alcan is a multinational, market-driven company and a global leader in aluminum and packaging, as well as aluminum recycling. With world-class operations in primary aluminum, fabricated aluminum as well as flexible and specialty packaging, aerospace applications, bauxite mining and alumina processing, today's Alcan is even better positioned to meet and exceed its customers' needs for innovative solutions and service. Alcan employs 88,000 people and has operating facilities in 63 countries. |
