Alcoa to close Texas smelter, lay off 660 workers

01 October 2008

Mumbai: Alcoa Inc, the world's leading producer of primary and fabricated aluminium, said that it would close its Rockdale, Texas operations and lay off around 660 workers by year-end because of ''local power supply problems and  decreasing demand'' for aluminium.

The lay-off is in addition to the 160 already laid off and Alcoa expects to record a third quarter 2008 pre-tax charge of approximately $48 million to cover the costs of the production cut-back.

Alcoa plans to curtail production at its 150,000 tonne Rockdale aluminum smelter with immediate effect because of, what it said, uncompetitive power supply to the smelter and overall market conditions.

In June, the company idled three of the plant's six operating potlines, representing approximately 120,000 tpa of production, because of power supply problems.

The company will continue to operate its aluminum atomiser in Rockdale as well as its anode operations there, employing a total of 140 people. Lay-offs at the facility will be implemented in a phased manner, with the majority of the reductions occurring toward the end of November and in early December. Alcoa said it will adjust alumina production accordingly.

''When we initially curtailed half of our aluminum production in Rockdale,'' said John Thuestad, president of Alcoa's US primary products business, ''we said it would be extremely challenging to try to be competitive operating only half of the plant. Unfortunately, the cumulative effect of operating only half of the smelter, well-known issues regarding the cost and long-term reliability of the power supply in Rockdale, and current market conditions, has forced us to make this difficult decision.''