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Alcoa in Titanium Market

Author : admin Date : 4/12/2015 8:01:37 PM
 Alcoa announced its intention to spend $ 1.5 billion (also news that the $ 1.3 billion) acquisition of titanium production suppliers RTIInternational Inc. (RTI). 80% of the company's business is concentrated in the aerospace and military aviation, involving energy and medical use of titanium alloy semi-finished production.


   The acquisition will be the final step in the development of high value-added products Alcoa diversification process, and will strengthen its position in the global aviation market.


2014 RTI sold 8573 tons of titanium products such as titanium tube and bars, the total value of $ 793.6 million, operating profit of $ 70.3 million. 2015, RTI in ensuring the increased revenue to $ 850 million of the premise, sales may drop to 7711 tons, operating profit of $ --9000 million. Expected in 2019, the company's revenue will increase to $ 1.2 billion. Alcoa plans to increase its share of the global aerospace. Currently, Alcoa is considering closing its smelting capacity by 14%, or 500,000 tons, the focus gradually shifted to high value-added products from more traditional products. Although the plant has been put into operation in Saudi Arabia, but from 2007 onwards, Alcoa's smelting capacity has been reduced by 1.3 million tons.


Analysts believe that the acquisition of RTI Alcoa undoubtedly enhance its influence in the world titanium industry's strong initiatives. From a strategic perspective, the deal proved that Alcoa is the gradual transformation. But the deal is "expensive", because the amount paid by Alcoa beyond RTI existing stock price.