Today, Alcoa (NYSE:AA) announced it will be increasing and expanding its investment in a Hungary plant that produces its forged aluminum truck wheels following heightened demand across Europe for the product.
Alcoa plans to invest $13 million in the plant in Székesfehérvár, Hungary, in an effort to double its production of the wheels by the end of 2015. The firm highlighted the reason behind the decision was the result of increased demand for the wheels, which require less maintenance, and are also more durable and lightweight than previous models. Alcoa rolled out is new surface-treated Dura-Bright EVO wheel in January.
"Demand for Alcoa's forged aluminum wheels continues to grow in Europe, as emissions regulations drive up the need for stronger, lighter and easier-to-maintain wheels that increase payload, reduce maintenance costs and enhance sustainability," noted Tim Myers, president of Alcoa Wheel and Transportation Products, in the company's press release. "Additional capacity at our manufacturing facility in Hungary positions us to capture this growth."
Alcoa began construction on the expansion of the product line at the beginning of this year, and it anticipates to be fully completed by the early part of next year. In addition to the $13 million investment from Alcoa, the Hungarian government will also put $4.4 million toward the project, which will create 35 new permanent jobs and 215 additional temporary ones during construction, according to the company.
"One of the most important players of the Hungarian-American economic cooperation's success story is Alcoa, bringing innovation-based, high added-value production into Hungary," added Péter Szíjjártó, Hungary's state secretary for foreign affairs and external economic relations.