Pechiney in Aluminum Growth Mode

French aluminum producer looks to grow its business through acquisitions

Pechiney SA, headquartered in Paris, France, is in the process of buying the equipment at the McCook Metals LLC mill located in McCook, Ill. The company also announced plans to shut down operations and transfer equipment to its plants in West Virginia and France once the deal is done.

McCook Metals LLC, owned by Michigan Avenue Partners, is in the process of downsizing its McCook aluminum sheet and plate rolling mill.

The company filed for Chapter 11 bankruptcy protection in the summer of last year due to economic reasons and was put on the auction block where Pechiney successfully bid for the assets.

The acquirement of the McCook assets by Pechiney is one of a series of acquisitions and expansions that Pechiney has executed in recent years and the company has plans for more. The company announced early this year its intention to spend in excess of $500 million on acquisitions and expansions over the next three years.

Pechiney entered the U.S. aluminum manufacturing market in late 1999 with the acquisition of Century Aluminum’s Ravenswood, West Virginia aluminum sheet and plate mill and a cast aluminum plate mill in California. Soon after the acquisition, the company initiated a capital improvement program at the Ravenswood mill and is now nearing completion of a $50 million expansion to increase the Ravenswood rolling mill capacity up to 60 million pounds of aluminum sheet a year. Pechiney used Voest-Alpine Industries Incorporated (Canonsburg, Pa.) to turnkey the revamp of the hot and cold rolling mills at the site.

The company has also been studying smelter additions or expansions in Australia, South America, and the Netherlands. The company just announced plans to expand its joint venture Tomago smelter in Australia. The South American project was to be located in Puerto Ordaz, Venezuela. The two-phase $750 million project would ultimately produce 500,000 tons of aluminum annually. Late this year, the company should begin construction of a $100 million expansion of its Vlissingen, Netherlands aluminum smelter. Industrial Information Resources Inc.