Alcoa on way to meeting revenue growth goals -CEO

 

 

"On rolled products -- we set a target of adding $2.5 billion revenue to the top line by 2013," he said of the business that produces flat-rolled aluminum for the auto and aviation markets among others.

 

 

"I believe we will get 50 to 60 percent of that revenue growth this year," Kleinfeld said at the company's investor day meeting at an Alcoa plant in Davenport, Iowa.

 

 

He said much of the growth was from the auto industry, where new fuel efficiency requirements are driving demand for lighter-weight car and truck bodies. Also, there was sales growth in the aerospace sector, where plane makers have a considerable backlog of orders.

 

 

Kleinfeld also said that the company expected a boost in its engineered products business, which provides specialized aluminum products for various industries.

 

 

"This is an undiscovered gem," he told an audience that included Wall Street analysts. "We set a revenue growth target of $1.6 billion by 2013 and I believe we can generate 40 to 45 percent growth in 2011."

 

 

Kleinfeld said "headwinds" from global economic woes as well as currency movements and energy costs, are affecting the company's other two businesses -- the mining of bauxite which is refined into alumina, and the smelting of alumina into primary aluminum.

 

 

But he expects to generate more revenue from alumina as the company switches away from LME (London Metal Exchange) pricing to one based on alumina spot price indexes. On primary metal, Alcoa expects costs to come down once its new Ma'aden smelter in Saudi Arabia comes on line in 2014.

 

 

Last year, Alcoa had total revenue of $21 billion, an increase from $18.4 billion in 2009. In the third quarter, revenue was $6.4 billion, with much of the sales growth coming from autos, commercial transport, packaging and aerospace, the company said.

 

 

Alcoa stock fell 3.6 percent to $10.39 in afternoon trading on the New York Stock Exchange on a day when the broader market was down.