Alcan To Close European Smelting Plants As Costs Soar

Canadian aluminum producer Alcan will be forced to close 20% of its smelting capacity in Europe owing to high energy prices and the strength of the euro, Alcan executive vice president Richard Evans said in an interview on April 18.

"We have a number of smelters in Europe that are relatively modern with competitive energy contracts. But there are some older ones and those will be challenged," Evans told the Financial Times. He said Alcan expected that three out of its nine European smelters, representing 20% of its European capacity of one million metric tons a year, would be closed or would change function when their energy contracts came to an end.

He said that the strength of the euro had increased Alcan's European costs by 30% in local terms and that despite higher aluminum prices, the euro and energy costs were "putting tremendous pressure on France and Germany and forcing delocalization".

Alcan acquired French aluminum maker Pechiney in late 2004, creating the biggest packaging and the second-biggest aluminum group in the world.

Copyright Agence France-Presse, 2005

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