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Alcoa Merges Groups to Create Alcoa Recycling

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Alcoa Inc. (AA - Analyst Report) announced that it will merge Evermore Recycling LLC, its used beverage can (UBC) procurement group, with its aluminum scrap purchasing group to create a new single group called Alcoa Recycling.

Evermore Recycling recycles aluminum in the packaging market and the aluminum scrap purchasing group recycles aluminum used in other markets such as aerospace and automotive. Both these groups recycled about 1.4 billion pounds of external aluminum in 2012. Alcoa is taking the step to combine the two groups to further increase the amount of aluminum that is converted back into new products.

Michael Boyle, Director of Metal Management at Alcoa, will oversee the combined group. Boyle stated that by combining the two groups Alcoa will be able to capitalize on the strengths of both the groups and interface the market as a single entity. The new organization will work upon the huge number of closed-loop recycling programs that it has with its customers and will also implement supply chain efforts with suppliers to increase aluminum recycling.

Last month Alcoa also entered into a closed-loop recycling program with Boeing (BA - Analyst Report) that is expected to increase the reuse of internal aluminum aerospace alloys from the production of Boeing airplanes. About 8 million pounds of high-value 2XXX and 7XXX series aluminum alloys are expected to be recycled annually. Alcoa has long been into recycling and its Tennessee Operations contain roughly 90% total recycled content.

Recently, Alcoa also broke ground on a $275 million expansion of its Tennessee operations. This is Alcoa’s second U.S. automotive expansion to meet increasing demand for light, durable and recyclable aluminum sheet for auto production.

Alcoa, a prominent player in the mining industry along with Aluminum Corporation of China Limited and BHP Billiton Limited (BHP - Analyst Report), is a world leader in production and management of primary aluminum, fabricated aluminum, and alumina. The company is also the world’s largest miner of bauxite and refiner of alumina.

Alcoa currently retains a short-term Zacks Rank #3 (Hold).

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