Alcoa merges six business units into three

Alcoa Corp, the world's third-largest producer of aluminum behind Rio Tinto Alcan and Rusal, yesterday said that it would merge its six business units into three divisions to reduce complexity and lower costs.

The New York-based company said that it will combine the aluminum smelting, cast products and rolled products businesses, along with the majority of the energy segment assets, into a new Alcoa Aluminum business unit.

As a result, Alcoa's three business units will be Alcoa Bauxite, Alcoa Alumina and Alcoa Aluminum.

Tim Reyes, president of Alcoa cast products - will head the new aluminum business, while Martin Briere, president of the aluminum unit, will leave the company.

''Our strategic goals include reducing complexity, driving returns to create stockholder value and strengthening the balance sheet,'' said Roy Harvey, CEO of Alcoa.

''Streamlining our number of business units is aligned with those goals, and will increase our operational agility, lower costs, and promote more efficient internal coordination. We will continue to review our company structure and processes to ensure that Alcoa remains resilient through all market cycles,'' he added.

The move comes a year after Alcoa split into two publicly-traded entities, with one retaining the Alcoa name and focused on the traditional smelting business, while the other was named Arconic Inc, which specialises in higher-end aluminum and titanium alloys for the automotive, aerospace and construction industries. (See: Aluminum giant Alcoa to split into two publicly traded entities)

The company's segment reporting will continue to align with the business units. Beginning with the first quarter of 2017, Alcoa's operating and reportable segments will both be bauxite, alumina and aluminum.