Alcan to spend up to S58 million on headquarters in downtown Montreal

MONTREAL - Alcan's decision to spend up to $58 million to expand and renovate its headquarters in Montreal solidifies Quebec's international economic prestige in the crucial aluminum business, provincial politicians said Monday.

Alcan has purchased a century-old Salvation Army church that will be preserved and incorporated into a development whose construction is scheduled to begin early this year and be completed by the end of 2009.

"We are very proud of the confidence that you are showing in Quebec. It's important to keep companies here that are part of such an important economic sector and one linked to the economic history of Quebec," Economic Development Minister Raymond Bachand said following the expansion announcement.

Alcan, one of the world's largest aluminum companies, controls 56 per cent of Quebec's total aluminum production. It employs 12,000 Quebecers and generates $2.5 billion in annual economic return for the province.

The expansion of its headquarters comes a quarter century after the company renovated old buildings on Sherbrooke Street to build its Maison Alcan headquarters.

Although the Quebec government isn't contributing funds to the expansion, maintaining the Montreal head office was part of negotiations that saw the province contribute $400 million to a $2.1-billion expansion of Alcan's operations in Saguenay, Que.

"If the headquarters ever went elsewhere, there would be investment consequences for Alcan in Quebec, which is totally normal," said Premier Jean Charest.

The restriction won't prevent the company from being taken over, but it would force the new owners to honour certain commitments, the premier said.

Alcan CEO Dick Evans said he doesn't view the obligation as a "poison pill" to a takeover. But he added improvements in the company's financial performance over the past six months have dampened takeover talk.

"What we're doing here is consolidating our presence in Montreal," he said.

The building's modernization, which is expected to receive LEED environmental certification, could cut annual operating costs by 10 to 20 per cent.