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2008 FIN – Alcoa CEO: Fasteners "Extremely Profitable"

January 25
00:00 2013

FASTENER HISTORY
2008 FIN – Alcoa CEO: Fasteners “Extremely Profitable”

May 29, 2008 FIN – Alcoa CEO Klaus Kleinfeld told Dow Jones News that Alcoa won’t be shy in making bolt-on acquisitions on the downstream side, noting a recent deal to buy two aerospace fastener businesses.
During the first quarter of 2008 Alcoa boosted its aerospace capacity by acquiring Republic Fastener Manufacturing Corp. and Van Petty Manufacturing, both of Newbury Park, CA. The companies have a total of 240 employees and combined 2007 revenue of $51 million.
“You don’t feel emotionally attached to a fastener until you realize that it attaches the plane [that you’re sitting in] together,” Kleinfeld said. “They’re highly sophisticated, tiny elements, extremely profitable, and the market is suffering from a lack of supply.”
Alcoa’s Engineered Solutions segment, including Alcoa Fastening Systems, reported revenue topped $5.7 billion in 2007, while income declined to $316 million, despite a 36% jump in profit at AFS.
Skyrocketing oil prices are a “big concern” for Alcoa at present. Energy accounts for around one third of the cost of aluminum smelting production. The aluminum giant has renegotiated contracts at its smelters in the U.S.
Bullish aluminum prices will encourage Alcoa to participate in future merger and acquisition activity as a continued vote of confidence in the sector, Kleinfeld stated.
Sustainable, environmentally friendly energy sources are also becoming a focus, with a possible new smelter project in Greenland expected to use renewable energy. Web: alcoa.com ©2008/2013 Fastener Industry News.
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