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Essay / Research Paper Abstract
This 6-page paper focuses on Alcoa and the aluminum manufacturing industry. The paper discusses Alcoa's pricing and inputs, while talking about the impact of global competition on the company. Bibliography lists 2 sources.
Page Count:
6 pages (~225 words per page)
File: D0_MTalcoaana.rtf
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Unformatted sample text from the term paper:
aluminum (Partheymuller, 2009). During FY 2007, the company operated through six segments: Alumina, primary metals, flat-rolled products, extruded and end products,
engineered solutions and packaging and consumer (Datamonitor, 2008). In February 2008, the company sold its packaging and consumer businesses to Rank Group in New Zealand for $2.7 billion (Datamonitor, 2008).
Industry - Pricing The problem that aluminum manufacturers world-wide are facing are huge increases in aluminum pricing (Datamonitor, 2008). The costs
have increased from $1,874 per ton in 2005 to $2,315 per ton in 2006 (Datamonitor, 2008). Part of the reason for this is a growing construction market in Asia and
a reduction in smelting capacity because of high costs of electricity and raw materials (Datamonitor, 2008). Nor will those prices go
down any time soon - ever-shrinking supplies and increased world demand are likely to push prices of aluminum to $4,500 per ton by the end of 2009 (Datamonitor, 2008). Because
Alcoa is vertically integrated, an increase in aluminum pricing would likely be a good thing (Datamonitor, 2008). The downside, however, would be the costs of the raw materials and electricity
necessary to produce the aluminum. For Alcoa specifically, the company has seen increasing indebtedness during the past few years (Datamonitor, 2008).
The total debt in FY 2007 was just under $8 million, with debt as a percentage of invested capital standing at more than 30% (Datamonitor, 2008). Increasing indebtedness could have
an impact on the companys future growth (Datamonitor, 2008). Production The companys metals segment is made up of Alcoas smelters, which
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