Problems that Alcoa are facing

Although Alcoas capacity expands during the 1970s, but it werent sufficient equal to keep up with the worlds growing engage for alumina and aluminium. For example, during 1979, Alcoas two alumina refineries and the Point henry aluminum smelter operated over it capacity and inventory stocks were reduced. The dearth of aluminum in Australia had been especially severe; the demand had fully grown 17 percents in 1979 and reach to 220,000 tons per year. Thus, Alcoas aluminum supply was limited. So in order to ensure that semipermanent customers were treated equitably, the company gave domestic customers priority except when see contract commitments to export customers. Because of this strategy, it prevented Alcoa from benefiting from the high prices for aluminum outside Australia. During that time, the Australian price for aluminum ingot had remained at $0.69 per exhaust in 1979, while the official international price had risen from $0.56 per pound to $0.73 per pound. The actual worlds price was even higher, ranging amongst $0.75 per pound and $0.83 per pound.
Alcoa was determined to retain it position as an eventful supplier of alumina and aluminum to Australian and world markets. Alcoas management also predicted that the demand for these two products would remain wet during the 1980s.



So they planned several capacity expansions to prepare for this expect growth and to relieve the strain and inefficiencies of continually operating supra capacity.
Thus, the company proposed three projects in the expansion. atomic number 53 project is to emergence alumina refining capacity by 500,000 tons per year, and the eddy of the new refinery at Wagerup would cost A$320 million (A=Australia). The other two projects were to increase the aluminum smelting capacity to 297,000 tons per year. One smelter was constructed at Point Henry and the other was at Portland. The total cost for the two projects added up to A$460 million.
This A$780 million expansion plan was too costly for...If you sine qua non to get a full essay, order it on our website: Orderessay



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