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Alcoa Expands Wheel Plant in Hungary

Zacks Equity Research

Aluminum giant Alcoa Inc. (AA) announced that it is investing $13 million in Szekesfehervar, Hungary, to expand its plant to meet increasing European demand for truck wheels, which are more durable and lightweight than earlier models with minimum maintenance.

With the expansion of the plant, Alcoa will be able to produce twice as many Dura-Bright EVO surface-treated wheels in Europe by early 2015. The Dura-Bright EVO has all the benefits which were present in its predecessor, the Dura-Bright wheel with XBR technology.

The Dura-Bright EVO surface-treated wheel is 10 times more resistant to corrosion primarily caused by road salts and weather elements and is also about three times more resistant to chemicals, including hydrofluoric acid, found in the toughest truck cleaning agents. Dura-bright treated wheel helps in retaining the shine even after use for many years without the need for polishing.

Alcoa commenced the construction on the product line expansion in Jan 2014 and expects it to complete in early 2015. The expansion will create 35 new permanent jobs and around 215 temporary jobs during construction. In addition to Alcoa’s $13 million investment, the Hungarian government will also contribute $4.4 million toward the construction through its Regional Operative Program.

The expansion will increase Alcoa’s presence in Hungary and add to its portfolio which produces value added products for the automotive and aerospace industries.

Alcoa, a prominent player in the mining industry along with Aluminum Corporation of China Ltd. (ACH), Atlatsa Resources Corp. (ATL) and BHP Billiton Ltd. (BHP), is a world leader in production and management of primary aluminum, fabricated aluminum, and alumina.
Alcoa currently retains a Zacks Rank #2 (Buy).

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