As a global aluminum firm focusing on both upstream and downstream
business, Alcoa regards China as an increasingly important emerging
market. While the Chinese government attaches increasing importance
to energy efficiency and emissions reduction, Alcoa offers
suggestions to save energy and protect the environment. Helmut
Wieser, vice-president of Alcoa and group president responsible for
Alcoa's global mill products, rigid packaging and hard alloy
extrusion businesses, shares the company's views on energy
efficiency and business expansion in China with
China
Daily.
Q: What are your views on the development of
China's aluminum industry, both upstream and downstream
segments?
A: China's aluminum industry has undergone a
very impressive development, and the growth is just phenomenal. We
are glad that Alcoa has participated in the growth process with
Chinese partners. Alcoa came to China in 1993 and has invested over
$700 million so far in the country. Looking back several years ago,
China's aluminum industry was small. But today, China has become
the world largest aluminum producer and market. Quite a few Chinese
newspapers were talking about the possibility that China aluminum
consumption would take in 30 percent of the global aluminum
production by 2015. This is a significant contribution to the
growth of the aluminum industry.
I noticed that China is encouraging its aluminum companies to
develop more technologies for extensive use of aluminum in various
industries and areas. That is a great practice. Aluminum has
advantages that many other metals cannot match. For example, use of
aluminum, instead of steel, for automobiles and commercial vehicles
can significantly reduce the weight of vehicles. As a direct
result, the vehicle will produce less greenhouse gas (GHG) and
consume less gasoline.
Q: There are reports saying that Alcoa was
looking for expansion opportunities across both the upstream and
downstream sectors of the aluminum industry in China. Is that so?
If it is, through what means is Alcoa seeking business expansions
in China - through organic growth or mergers and acquisitions, or
both?
A: Alcoa understands the importance of the
growth of China's economy and the opportunities that growth brings
to all of us. As such, Alcoa will do two things. First, we will
continuously improve our operations in China to make it more
productive and more environmentally and energy sensitive. Second,
we will keep our eyes open for growth opportunities. This could
mean organic or inorganic growth. China is growing so fast, and
Alcoa is determined to grow with China. This is a win-win
situation. As to a preference of investment methods, I am open to
any approach solely depending on business needs and situational
demands.
China, as the world's largest aluminum producer as well as
market, provides tremendous opportunities for everyone. My priority
is to make this company fully prepared and ready to face challenges
and capture opportunities. It is important to point out that Alcoa
is willing and ready to bring to China many of its technologies
that will help China's aluminum industry reduce emissions and
energy consumption.
Q: It is said that no aluminum fabrication
business can succeed without upstream leadership. It seems Alcoa
has not established its upstream facilities in China. Are you
planning to make any changes in this regard?
A: The aluminum industry is a vertically
integrated industry. If you look at a successful aluminum company,
you may find that it is always globally integrated. One cannot look
at a successful aluminum company's operation in one country only.
Alcoa has operations in over 40 countries with nine refineries and
26 smelters. Alcoa has access to bauxite, refinery, smelting and
fabrication. Alcoa is recognized by the industry as the leader in
energy development. As a matter of fact, Alcoa is the largest
energy company, second only to energy and utilities companies.
Alcoa is working with various Chinese companies and is continuously
exploring business opportunities to expand its business in
China.
Q: What is Alcoa's view on the sale of Chalco's
stake?
A: Alcoa had been a significant investor in
Chalco since its initial public offering (IPO) in 2001, holding
approximately 7 percent of its shares. Although Alcoa normally does
not act as a financial investor, it participated in the Chalco IPO
six years ago to help facilitate Chalco's entry into the capital
markets. Over the past seven years, Chalco has become firmly
established in the equity market, so Alcoa's role as a financial
investor is no longer needed. Alcoa can re-deploy the capital in
other value-adding options, including projects in China. Alcoa will
continue to pursue opportunities with Chalco for mutual investment
and growth, both within China and overseas.
Q: What is your suggestion for your Chinese
counterparts and the Chinese authorities to maintain sustainable
development in the aluminum segment?
A: Many of our Chinese counterparts are doing
well, and some are doing better. Growth should not mean an increase
of pollution. The most important point is that every one of us
should keep the environment and energy use in our minds when we
grow. It may cost some money to develop technology or to install
certain devices to reduce emissions or to save energy. But every
company should take social responsibility as its operational
philosophy.
We are paying special attention to environmental protection,
even though this move costs us extra investment. Alcoa Shanghai has
a series of strict and thorough standards on environmental
governance. In 2007, a project with an investment of 2.56 million
yuan is under way to improve the waste-water treatment facility and
install dust catchers for four melting furnaces to catch dust
during the processes of ignition, refining and skimming. As a
result, the particle-removal efficiency is expected to be higher
than 90 percent, which will lead to an annual emission reduction of
42.43 tons.
We are glad to see that the Chinese government is taking an
active role in environmental protection and energy efficiency. As a
matter of fact, Alcoa is working closely with the relevant Chinese
government agencies to further promote environmental protection and
energy efficiency. In these areas, China has a long way to go, and
there will be many challenges in front of us. But I am very certain
and positive that China's aluminum industry will become a more
energy-efficient and environmentally friendly with our joint
efforts.
(China Daily November 20, 2007)
