Point Comfort Refinery in Texas to Permanently Close
December 16 2019 - 4:10PM
Business Wire
Alcoa Corporation, a global leader in bauxite, alumina, and
aluminum products, today announced that it will permanently close
its Point Comfort alumina refinery in Texas.
The site’s 2.3 million metric tons of annual alumina capacity
has been fully curtailed since June of 2016. In October of 2019,
Alcoa announced that it was conducting a review of its global
production capacities to drive lower costs and sustainable
profitability. The review includes 4 million metric tons of alumina
capacity, or approximately 27 percent of the Company’s total global
refining capacity.
“We operate one of the world’s largest alumina refining systems,
and we are committed to maintaining our strong, first-quartile
position,” said Alcoa President and Chief Executive Officer Roy
Harvey. “While this decision is difficult because of the long
history of operations in Point Comfort, we must eliminate
unprofitable capacity and continue to improve our Company for the
long term.”
The Point Comfort refinery is a part of Alcoa World Alumina and
Chemicals (AWAC), a group of companies owned 60 percent by Alcoa
and 40 percent by Alumina Limited.
Alcoa will record restructuring charges in the fourth quarter
2019 of approximately $175 million (after-tax and noncontrolling
interest), or $0.94 per share, related to the permanent closure.
Alcoa’s share of related cash outlays is approximately $115 million
with the majority to be spent in the next five years ($25 million
expected in 2020).
Beginning in 2020, the closure is expected to result in annual
net income improvement of approximately $15 million (after-tax and
noncontrolling interest) and cash savings of approximately $10
million (Alcoa’s share) when compared to the ongoing spend for
curtailment, exclusive of closure costs.
Point Comfort’s current employment of approximately 45 will be
reduced as part of the closure, with any remaining personnel
managing the demolition, decommissioning and remediation activities
to prepare the location for potential redevelopment
opportunities.
The AWAC partnership agreements between Alcoa and Alumina
Limited provide for an allocation of certain liabilities occurring
before AWAC’s formation on January 1, 1995, according to the
party’s preformation ownership interest. While Alcoa and Alumina
Limited are currently in the process of allocating AWAC’s Point
Comfort-related costs and liabilities in accordance with those
provisions, the recorded charges represent Alcoa’s current view of
the liabilities.
About Alcoa
Alcoa (NYSE: AA) is a global industry leader in bauxite,
alumina, and aluminum products, and is built on a foundation of
strong values and operating excellence dating back more than 130
years to the world-changing discovery that made aluminum an
affordable and vital part of modern life. Since developing the
aluminum industry, and throughout our history, our talented Alcoans
have followed on with breakthrough innovations and best practices
that have led to efficiency, safety, sustainability, and stronger
communities wherever we operate. Visit us online on www.alcoa.com,
follow @Alcoa on Twitter, and on Facebook at
www.facebook.com/Alcoa.
Dissemination of Company Information
Alcoa Corporation intends to make future announcements regarding
company developments and financial performance through its website
at www.alcoa.com.
Forward-Looking Statements
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events and expectations and as such constitute forward-looking
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Reform Act of 1995. Forward-looking statements include those
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“would,” or other words of similar meaning. All statements that
reflect the Company’s expectations, assumptions or projections
about the future, other than statements of historical fact, are
forward-looking statements. Forward-looking statements are not
guarantees of future performance and are subject to known and
unknown risks, uncertainties, and changes in circumstances that are
difficult to predict. Although the Company believes that the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, it can give no assurance that these
expectations will be attained and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and
uncertainties. Additional information concerning factors that could
cause actual results to differ materially from those projected in
the forward-looking statements is contained in our filings with the
Securities and Exchange Commission. The Company disclaims any
obligation to update publicly any forward-looking statements,
whether in response to new information, future events or otherwise,
except as required by applicable law.
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Investor Contacts James Dwyer 412-992-5450
James.Dwyer@alcoa.com
Media Contacts Jim Beck 412-315-2909 Jim.Beck@alcoa.com
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