Alcoa to upgrade Brazil rolling mill owing to rising specialty packaging demand

Wednesday, Apr 02, 2014

 US-based alumina and aluminium producer, refiner and products manufacturer Alcoa on Tuesday said that it planned a $40-million upgrade at its Itapissuma rolling mill, in Brazil, to increase its specialty foils output for aseptic and flexible packages.

The NYSE-listed firm noted that demand for specialty packaging in Brazil was expected to rise 7%/y over the next three years owing to population growth and consumer preference.

All additional capacity had been fully committed.

“Alcoa enjoys a leading market position in specialty foil in Latin America where our value-add aluminium is essential for producing highly differentiated packaging. A growing number of consumers prefer this type of packaging because it keeps products fresher, longer and our expansion will enable Alcoa and our customers to capture that rising demand,” Alcoa president of Latin American and the Caribbean Aquilino Paolucci said.

Aseptic and flexible packaging made with specialty foil is the most highly differentiated type of container in packaging. Premium food and beverage companies around the world use aseptic packaging, which allows liquid food products to retain more nutrients and taste, and remain ready for consumption for up to 12 months, even if unrefrigerated.

The packages – more than 175-billion of which were delivered globally in 2013 – are typically a mix of materials such as cardboard type paper, plastics and thin aluminium.

The Itapissuma packaging facility is located in the state of Pernambuco, which is in the Recife region, and employs about 700 people. The expansion was expected to add about 50 jobs at the plant after output had been increased.

Initial work for the expansion is under way and commissioning was expected to start in 2016.

Last week Alcoa said that the continued challenging global market conditions in primary aluminium, and increased costs, had made two smelters in Brazil uncompetitive, and would, therefore, be closed at the end of May.

Alcoa announced that it would curtail 147 000 metric tons of smelting capacity at its São Luís (Alumar) and Poços de Caldas smelters.

Last year, the company curtailed 97 000 metric tons at São Luís and 34 000 metric tons at Poços. The new curtailments would include the remaining 62 000 metric tons of capacity from the Poços smelter, resulting in a full curtailment of its three potlines. Another 85 000 metric tons would be curtailed at São Luís.