Alcan May Make Acquisitions After Metal Prices Fall, Evans Says

April 24 -- Alcan Inc., the world's second- biggest aluminum company by sales, probably will wait until metal prices and asset values decline before making acquisitions, Chief Executive Officer Richard Evans said.

"At some point in the future there will be some softness," Evans said today during a call with investors and analysts from Montreal, where the company is based. "We would expect to be in a strong financial position at that point and be much more aggressive on the acquisition side."

The price of aluminum has more than doubled in the past five years, boosting profits for producers and inflating asset values, Evans said. Alcan today reported a 30 percent jump in first-quarter profit. The company will focus on expanding existing projects rather than considering buying "quite pricey" mining or aluminum-production assets, Evans said.

"Alcan is expecting aluminum production to increase 10 percent this year, which shows we are late in the cycle," said Tim Ghriskey, who manages $1 billion as chief investment officer at Solaris Asset Management LLC in Bedford Hills, New York. "The company has a good record of integrating acquisitions and we'd expect them to take further advantage of that."

Alcan is using cash to buy back stock and focus on projects such as expansions of smelters in Oman, British Columbia and South Africa.

Aluminum for delivery in three months fell $23, or 0.8 percent, to $2,840 a metric ton today on the London Metal Exchange. The metal reached $3,310 on May 11 last year.