Alcoa Spinoff Arconic Plans Capex for 2017

Researched by Industrial Info Resources (Sugar Land, Texas)--Arconic Incorporated (NYSE:ARNC) (New York, New York), the downstream spinoff of aluminum giant Alcoa Incorporated, on Wednesday announced plans to put $650 million toward capital expenditures in 2017. Of this, $136 million remains under review. Industrial Info is tracking $3.59 billion in projects belonging to Arconic and Alcoa Corporation (NYSE:AA) (New York) throughout the world.

Arconic was formed November 1, when Alcoa Incorporated split into Arconic, to provide precision engineering and manufacturing for downstream products, and Alcoa Corporation, an upstream company, including bauxite, alumina and cast products. For more information, see July 5, 2016, article - Splitsville for Alcoa: Executives Still Mum on Capex for New Companies.

Arconic expects 2016 revenue to be $12.1 billion to $12.6 billion, and 2017 revenue to be $11.8 billion to $12.4 billion. The company holds a 19.9% stake in Alcoa Corporation. The company continues to be a leading supplier to the automotive and aerospace markets. As automotive manufacturers continue to increase the use of aluminum in their automobiles, Arconic estimates that its auto sheet revenue will grow six times from 2013 levels to $1.3 billion in 2018.

Projects previously under the auspices of Alcoa Incorporated, but now belonging to Arconic, include the planned $750 million aluminum micromill plant expansion in Elmendorf, Texas, near San Antonio. The full-scale micromill will manufacture advanced aluminum sheet product for automotive, industrial and packaging applications. The project is expected to kick off next summer and be complete by the end of 2018.

Also on the books is the expansion of the aluminum works in Riverdale, Iowa. The $190 million expansion will include installation of a thick plate stretcher to enhance the performance of thick aluminum and aluminum-lithium plate in various applications. Walbridge Construction Company (Detroit, Michigan) is acting as general contractor on the project, and Fluor Enterprises Incorporated (Greenville, South Carolina) is performing engineering work.

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