In a move to address increasing demand for next-generation
aircraft engine parts, aluminum giant
) is investing $25 million to beef up capacity at its power and
propulsion facility in Hampton, VA. The investment is in sync with
Alcoa's strategy to profitably grow its aerospace business.
The investment has been geared at developing a state-of-the-art
process technology dubbed - enhanced equiax (EEQ) casting - which
will reduce the weight of highest-volume jet engine blades by 20%
and boost aerodynamic performance for improved fuel efficiency.
Alcoa said that it will add equipment for a new production line and
modify existing machinery at the Virginia facility to make lighter,
nickel-based airfoil blades for top selling jet engines. These
blades can be used to retrofit existing or build next-generation
aircraft engines. Alcoa will utilize the most advanced
manufacturing technologies such as robotics and digital x-ray for
enhanced product inspection.
The expansion project will start this month and is expected to wrap
up by fourth-quarter 2015. The expansion is expected to add at
least 75 new, full-time employees over three years. Alcoa will get
roughly $2 million in state and local incentives and another $1.3
million exemption on sales and use tax for choosing Hampton for the
Alcoa, which derived $4 billion in sales from its aerospace
business last year, makes lightweight metallic solutions for the
aerospace industry. It holds leading market positions in aerospace
forgings, extrusions, jet engine airfoils and fastening systems
made by its downstream business, and aerospace sheet and plate made
by its midstream business.
Alcoa, last month, broke ground on its new $100 million aerospace
expansion in La Porte, IN, where it will produce nickel-based
superalloy jet engine parts for large commercial aircraft,
including narrow and wide-body and military airplanes.
The 32,000 square-foot plant will increase Alcoa's capacity to
supply engines for narrow-body aircraft. It will also enable Alcoa
to produce parts about 60% larger than components it already
produces, thus expanding its market presence to wide-body
Alcoa is witnessing healthy airline fundamentals. The company, in
Apr 2014, bumped up its global aerospace growth expectations for
2014 to 8%-9% from 7%-8% factoring in strong demand for both large
commercial aircraft and regional jets and sustained growth in the
business jet market.
Alcoa is a Zacks Rank #3 (Hold) stock.
Other mining companies worth considering include
Hi-Crush Partners LP
BHP Billiton Limited
First Quantum Minerals Ltd.
). While Hi-Crush Partners carries a Zacks Rank #1 (Strong Buy),
both BHP Billiton and First Quantum hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ALCOA INC (AA): Free Stock Analysis Report
BHP BILLITN LTD (BHP): Free Stock Analysis
HI-CRUSH PTNRS (HCLP): Free Stock Analysis
FIRST QUANTUM (FQVLF): Get Free Report
To read this article on Zacks.com click here.