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Alcoa Expands Aluminum-Lithium Production

Alcoa (NYSE: AA  ) is expanding production capacity at its Kitts Green facility in the United Kingdom.

On Tuesday, the aluminum giant announced that it has completed a project that will help it soon quadruple the amount of third-generation aluminum lithium alloys it produces for the aerospace industry. According to the company, its revenues derived from the alloy are about $50 million annually today, but within six years' time could become a $200 million business.

The company notes that it's also expanded production of the new alloy at a plant in Pennsylvania, and will have a new facility for the metal's production set up in Lafayette, Ind., by the end of next year.

Alcoa said the new alloy will help airframers "build more fuel efficient and lower-cost airplanes vs. composite alternatives." Thus, these expansions could be characterized as moves by Alcoa to protect its market share in an industry that's increasingly shifting toward the use of advanced carbon composites for use in building its airplanes.

In a recent story, the The Wall Street Journal said composites -- formerly a niche product -- now make up 50% of the materials used to build Boeing's 787 Dreamliner, and 53% of the Airbus A350. Aluminum, in contrast, makes up only 20% of the 787, and 19% of the A350.

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Rich Smith
TMFDitty

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

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4/24/2015 4:01 PM
AA $13.22 Up +0.03 +0.23%
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