Alcoa to Shutter Smelting Plants in Italy and Spain as Part of Capacity Reduction
A plan by aluminum-industry leader Alcoa to slash global smelting capacity will result in the closure of plants in Italy and Spain, the firm said Monday.
Less than a week after announcing that it will shutter facilities in Tennessee and Texas, Alcoa said its bid to reduce smelting capacity by 12% also will affect its operations in Europe.
The company said a plant in Portovesme, Sardinia, will be closed permanently, while plants in Galicia and Aviles in Spain likely will be idled temporarily.
The measures will take effect by the first half of 2012, and will come as a body blow in two countries that are laboring under high debt and weak economic growth.
Current employment at the three European plants is about 1,500 people, Alcoa said.
The U.S. and European closures are part of a plan to reduce Alcoa's global smelting capacity of 4.5 million metric tons per year, in the hope of lowering costs and becoming more competitive.
"An uncompetitive energy position, combined with rising raw material costs and falling aluminum prices, led to the planned curtailment of the facilities," the company said.
Alcoa has seen its earnings hit by lower metal prices as the European economy has stumbled.
The company is slated to release its fourth-quarter earnings after the equities markets close on Monday.
Copyright Agence France-Presse, 2011
