AkzoNobel Confirms Focus On Its Own Strategy To Accelerate Growth And Value Creation
AkzoNobel today announces it has declined a third unsolicited, non-binding and conditional proposal submitted by PPG Industries on April 24, 2017, for all outstanding ordinary shares in the capital of AkzoNobel.
AkzoNobel has concluded its own strategy, presented on April 19, 2017, offers a superior route to growth and long-term value creation and is in the best interests of shareholders and all other stakeholders.
This decision follows considerable in-depth analysis of PPG’s proposal by the Supervisory Board and Management Board of AkzoNobel, working closely with their financial and legal advisors. As part of this process, on May 6, 2017, Ton Büchner, CEO, and Antony Burgmans, Chairman of the Supervisory Board of AkzoNobel, met with Michael McGarry, Chairman and CEO, and Hugh Grant, Lead Independent Director of PPG.
In the execution of their fiduciary duties, the absolute focus of the Boards has been to determine whether the proposal by PPG fits with AkzoNobel’s strategic objectives, is in the best interests of the company and creates long-term value for shareholders and all other stakeholders.
After extensive consideration, the company has concluded that the interests of shareholders and other stakeholders are best-served by its own strategy to accelerate growth and value creation. That strategy set out a clear road map for:
The creation of two focused and high-performing Paints and Coatings and Specialty Chemicals businesses, to enable an acceleration of growth and enhanced profitability
Significantly increased financial guidance for Paints and Coatings and Specialty Chemicals
The clear separation of Specialty Chemicals within 12 months with the vast majority of net proceeds to be returned to shareholders
Increased shareholder returns, including a 50% higher dividend for 2017 and €1 billion special cash dividend payable in November
The creation of significant value for shareholders in the short, medium and long term, whilst also securing the interest of other stakeholders.
The extensive review and the meeting with PPG confirmed to AkzoNobel that its own strategy is better and does not contain the risks and uncertainties inherent in PPG’s proposal. This strategy will build on the existing growth momentum within AkzoNobel and create a step change in value creation for shareholders and all other stakeholders.
PPG’s proposal has been tested on four key areas: value, certainty, timing, and stakeholder considerations.
1. Value
The revised PPG proposal represents a value (cum dividend), as at April 24, 2017, consisting of €61.50 in cash and 0.357 shares of common stock of PPG per outstanding ordinary share of AkzoNobel1.
AkzoNobel’s analysis concludes that PPG’s proposal:
Undervalues AkzoNobel; it fails to provide appropriate value to AkzoNobel shareholders and does not reflect AkzoNobel’s current and future value
Does not include an appropriate change of control premium, which needs to be based on a valuation reflecting AkzoNobel’s strategy, including the recently announced plans to separate Specialty Chemicals and accelerate growth in Paints and Coatings
Implies a value for AkzoNobel’s Paints and Coatings business at a multiple below recent comparable transactions
Contains risks as a result of its stock component
Risks loss of value from regulatory remedies
Risks potential leakage of value through loss of customers, key employees and partners.
2. Timing
AkzoNobel’s strategy contains a clear road map to value creation with a commitment to increase shareholder returns for 2017, create two focused businesses within 12 months and increased financial guidance for 2020.
PPG’s proposal, by contrast, contains no such commitments on timing other than generic statements. Moreover, it contains no explanation of how it would execute the complicated separation of individual businesses within the combined business as likely required by anti-trust authorities and does not address any of the inherent risks and uncertainties.
Recent transactions in the Paints and Coatings, or broader Chemicals sector, suggest the transaction would face complex regulatory hurdles that could take up to of 18 months to complete.
AkzoNobel’s analysis concludes that PPG’s proposal:
Faces complex and lengthy regulatory hurdles which could take up to 18 months to complete
Would require significant time to implement while containing inherent risks of completion
Provides limited visibility in relation to the closing of the transaction and subsequent integration of the two businesses
Would require substantial and complex structural changes and be vulnerable to regulatory-led delays
3. Certainty
PPG has not undertaken an acquisition of this size and is unproven in terms of an integration challenge as complex as the one proposed. This acquisition would be around 8 times the size of any previous acquisition conducted by PPG and more than three times the total value of acquisitions completed by PPG during the past decade.
It has been clear since PPG submitted an initial proposal that anti-trust clearance would play a major part in the deliverability of the proposal, given the significant geographic and segment overlap that exists between the two companies.
PPG provides no clarification on how it would neutralize the anti-trust risks for AkzoNobel stakeholders. The scope and timescale to gain all anti-trust clearances in relation to multiple product segments in multiple markets is not stated by PPG. All of this would expose AkzoNobel to considerable uncertainty over an extended period of time.
Furthermore, the acquisition of AkzoNobel’s Specialty Chemicals business conflicts with PPG’s stated strategy of exiting the Specialty Chemicals market.
AkzoNobel’s analysis concludes that PPG’s proposal:
Requires significant and value-eroding disposals in order to achieve anti-trust approval
Would result in disruption to business momentum and dislocation as a result of forced divestitures of integrated manufacturing facilities and supply chains
Would be subject to significant integration risk.
Conflicts with PPG’s stated strategy of exiting the Specialty Chemicals market
4.Stakeholder considerations
PPG’s statements on the wide range of relevant stakeholder interests do not hold up to scrutiny or adequately address the uncertainties and risks for AkzoNobel stakeholders.
As such, PPG fails to reflect the standards in Dutch public takeovers in relation to securing non-financial covenants, including appropriate representation and veto rights in its Board to safeguard AkzoNobel stakeholder interests.
PPG’s proposals in relation to stakeholder concerns – affecting employees, pensions, location of headquarters, R&D and sustainability – are limited, or describe existing contractual arrangements.
PPG provides no commitments or evidence to support its assertion that employees of AkzoNobel will have any benefit under its ownership, nor does it give any indication how long various existing employee arrangements would remain unaffected and in place. On that point, PPG makes no meaningful commitments at all.
PPG’s failure to provide such guarantees or adjust its projected minimum $750 million synergy target creates widespread anxiety and uncertainty for thousands of jobs across AkzoNobel’s 46,000-strong workforce.
PPG’s statement that it will not relocate any of AkzoNobel’s production facilities from Europe to the US is essentially meaningless given that many AkzoNobel products, by their very nature, are often manufactured and distributed close to the markets they serve. The proposal makes no commitments regarding the potential closure of factories.
In relation to pensions, PPG’s commitment to fulfil AkzoNobel’s current top-up schedule to close the deficit in its UK pension schemes is an offer to respect an existing and ongoing obligation.
Sustainability is at the heart of how AkzoNobel does business. AkzoNobel regards its global leadership in sustainability and commitment to improve the communities in which it operates as an integral part of business success. Customers are increasingly identifying sustainability as a key element of their purchasing decisions. By contrast, PPG lags in the area of sustainability:
AkzoNobel has maintained a top 10 position in the Dow Jones Sustainability Index for the last 11 years
AkzoNobel is ranked considerably higher than PPG in recognized indices including Sustainalytics and Bloomberg ESG
In 2016 alone, AkzoNobel’s Human Cities initiative involved 300 projects impacting over 9 million people. This compares with PPG’s Colorful Communities program which, in the total period since its launch, has impacted 1.8 million people across 60 projects.
AkzoNobel’s analysis concludes that PPG’s proposal:
Creates significant risks and uncertainties for thousands of jobs worldwide
Does not recognize or substantiate any commitments to bridge the significant cultural differences between both companies
Fails to sufficiently address significant stakeholder concerns, uncertainties and risks
Lacks meaningful commitments or solutions customary in major transactions
Conclusion of extensive review
Taking all of the above factors into consideration, including the meeting with PPG, the Boards of AkzoNobel have concluded that PPG’s proposal is not in the best interests of the company, its shareholders and all other stakeholders.
Ton Buchner, AkzoNobel CEO, said:
“As part of our fiduciary duties we conducted an extensive review of the third proposal from PPG. This process included myself and Antony Burgmans meeting with the CEO and lead independent director of PPG to understand their proposal in more detail.
“The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding.
“By contrast, AkzoNobel has outlined a compelling strategy to accelerate growth and value creation which we believe will deliver significant long-term value for our shareholders and all other stakeholders. We will deliver this within a clear timeline, without the substantial level of risks and uncertainties attached to the alternative proposal.
“We have a strong track record of delivering on our commitments and are fully focused on accelerating growth momentum and enhanced profitability with the creation of two focused, high-performing businesses – Paints and Coatings and Specialty Chemicals – which will lead to a step change in growth and long-term value creation for shareholders and all other stakeholders.”
This is a public announcement by AkzoNobel N.V. pursuant to section 17 paragraph 1 of the European Market Abuse Regulation (596/2014). This public announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in AkzoNobel N.V.
Haribo Company Group Plant Construction Of A Production Site In Wisconsin
March 2017 HARIBO of America Inc. is pleased to announce that the HARIBO Group’s management and supervisory board have taken the decision to acquire a property in Kenosha County, South East of Wisconsin (USA). The world market leader in the fruit gum and liquorice segment is planning to set up its first production site in the USA.
“The decision to build a production site in Wisconsin is of great importance to the HARIBO Group,” said Hans Guido Riegel, Managing Director of the HARIBO Group.
“HARIBO of America is the fastest growing confectionery company in the US – so the step is to start with our own production from 2020 onwards.”
“HARIBO has been looking for the location for the first production facility in the USA for several years. In an elaborate process, we have examined many sites. Today, we are pleased to announce this important decision, “said Rick LaBerge, Executive Vice President and COO of HARIBO of America Inc.
“We are planning to build one of the largest sites in the confectionery industry,” said Wes Saber, Executive Vice President and CFO of HARIBO of America Inc. “The new location provides ideal conditions to expand and expand the successful HARIBO activities in the US To grow. ”
Sven Jacobsen Press Contact HARIBO Corporate Group E-Mail: moc.obirah@nesbocaj.nevs Phone: +49 (0) 228/537 – 606
HARIBO is a family company, now run by the third generation. The founder Hans Riegel had HARIBO GmbH & Co. KG registered on the 13th of December 1920 in the commercial register in Bonn. HARIBO is an acronym for HAns RIegel BOnn. The product “Tanzbär”, created by founder Hans Riegel, is today the cult figure of HARIBO and a world famous gold bear! Today, HARIBO is the world market leader in the fruit gum and liquorice segment. Alone 100 million GOLDBAREN are produced every day worldwide. The continuous brand management with the highest quality control as well as the trust of the consumers make up a large part of the success story at 16 production locations in ten countries. Almost 7,000 employees are now employed worldwide.
Danone and Nestlé Waters Launch NaturALL Bottle Alliance with California Startup to Develop 100% Bio-Based Bottles
Danone and Nestlé Waters, the world’s two largest bottled water companies, have joined forces with Origin Materials, a startup based in Sacramento, California, to form the NaturALL Bottle Alliance. Together, the three partners aim to develop and launch at commercial scale a PET plastic bottle made from bio-based material, i.e. 100% sustainable and renewable resources. The project uses biomass feedstocks, such as previously used cardboard and sawdust, so it does not divert resources or land from food production for human or animal consumption. The technology represents a scientific breakthrough for the sector, and the Alliance aims to make it available to the entire food and beverage industry.
Teaming up to accelerate development of 100% bio-based bottles
For decades, both Nestlé Waters and Danone have been committed to sustainable business practices, notably by continuously improving their environmental performances and promoting the development of a circular economy. A large part of these efforts has focused on developing innovative packaging solutions that are recyclable and made with renewable resources, as well as the promotion of recycling. After identifying the unique approach of Origin Materials separately, the two companies decided to team up to accelerate development of this promising technology.
“Our goal is to establish a circular economy for packaging by sourcing sustainable materials and creating a second life for all plastics,” declared Frederic Jouin, head of R&D for plastic materials at Danone. “We believe it’s possible to replace traditional fossil materials with bio-based packaging materials. By teaming up and bringing together our complementary expertise and resources, the Alliance can move faster in developing 100% renewable and recyclable PET plastic at commercial scale.”
Danone and Nestlé Waters are providing expertise and teams, as well as financial support, to help Origin Materials make this technology available to the entire food and beverage industry in record time.
This next-generation PET will be as light in weight, transparent, recyclable and protective of the product as today’s PET, while being better for the planet. The exclusive use of renewable feedstocks which do not divert resources or land from food production is the Alliance’s main focus area. The R&D will focus initially on cardboard, sawdust and wood chips but other biomass materials, such as rice hulls, straw and agricultural residue could be explored.
“Current technology on the market makes it possible to have 30% bio-PET,” noted John Bissell, Chief Executive Officer of Origin Materials. “Our breakthrough technology aims to reach 100% bio-based bottles at commercial scale. With the help of our Alliance partners, Origin Materials will be able to scale up a technology which has already been proven at the pilot level.”
A packaging revolution for all
The NaturALL Bottle Alliance partners consider that everyone should benefit from this new material, so the technology will be accessible for the entire beverage industry. This unique approach demonstrates the allies’ commitment to open innovation and sustainable business.
“It’s incredible to think that, in the near future, the industry will be able to use a renewably sourced packaging material, which does not compete with food production and contributes to a better planet,” commented Klaus Hartwig, Head of R&D for Nestlé Waters. “It therefore made perfect sense for us to join forces through this Alliance to develop this innovative technology in a large scale and in the shortest time period possible. This is an exciting journey and we are proud to be part of it.”
A packaging revolution in record time
Origin Materials has already produced samples of 80% bio-based PET in its pilot plant in Sacramento. Construction of a “pioneer plant” will begin in 2017, with production of the first samples of 60+% bio-based PET to start in 2018. The initial volume goal for this first step is to bring 5,000 metric tons of bio-based PET to the market. Thanks to their complementary skills and shared vision, the NaturALL Bottle Alliance aims to develop the process for producing at least 75% bio-based PET plastic bottles at commercial scale as early as in 2020, scaling up to 95% in 2022. The partners will continue to conduct research to increase the level of bio-based content, with the objective of reaching 100%
About Danone – www.danone.com
Dedicated to bringing health through food to as many people as possible, Danone is a leading global food company built on four business lines: Fresh Dairy Products, Early Life Nutrition, Waters and Medical Nutrition. Through its mission and dual commitment to business success and social progress, the company aims to build a healthier future, thanks to better health, better lives and a better world, for all its stakeholders—its 100,000 employees, consumers, customers, suppliers, shareholders and all the communities with which it engages.
Present in over 130 markets, Danone generated sales of €21.9 billion in 2016. Danone’s brand portfolio includes both international brands (Activia, Actimel, Danette, Danonino, Danio, evian, Volvic, Nutrilon/Aptamil, Nutricia) and local brands (Oikos, Prostokvashino, Aqua, Bonafont, Mizone, Blédina, Cow & Gate).
Listed on Euronext Paris and on the OTCQX market via an ADR (American Depositary Receipt) program, Danone is a component stock of leading social responsibility indexes including the Dow Jones Sustainability Indexes, Vigeo, the Ethibel Sustainability Index, MSCI Global Sustainability, MSCI Global SRI Indexes and the FTSE4Good Index.
About Nestlé Waters
Founded in 1992, Nestlé Waters is the water division of the Nestlé Group and the No. 1 bottled water company worldwide (sales of CHF 7.9 billion in 2016).
Nestlé Waters employs more than 31 000 people worldwide. With over 93 production facilities situated in 33 countries around the world, Nestlé Waters has a unique portfolio of more than 50 brands including Nestlé Pure Life, Perrier, S. Pellegrino, Poland Spring, Vittel, Buxton, Erikli …
For more information www.nestle-waters.com
About Origin Materials
Origin Materials is a company based in Sacramento, California. Origin tackles hard problems in materials in service of the world’s great companies. Origin’s technology produces bio-based intermediates from lignocellulosic (second generation) raw materials. Origin’s intermediates can be used to make new polymers, surfactants, and carbon blacks, each with differentiated performance.
More information about Origin can be found at www.originmaterials.com or info@originmaterials.com
ExxonMobil Plans Investments of $20 Billion to Expand Manufacturing in U.S. Gulf Region
HOUSTON– Exxon Mobil Corporation (NYSE:XOM) is expanding its manufacturing capacity along the U.S. Gulf Coast through planned investments of $20 billion over a 10-year period to take advantage of the American energy revolution, Darren Woods, chairman and chief executive officer, said Monday.
The projects, at 11 proposed and existing sites, are expected to generate thousands of new high-paying jobs and $20 billion in increased economic activity in Texas and Louisiana, Woods said, highlighting the company’s Growing the Gulf initiative in a keynote speech today at the CERAWeek 2017 conference.
“The United States is a leading producer of oil and natural gas, which is incentivizing U.S. manufacturing to invest and grow,” said Woods. “We are using new, abundant domestic energy supplies to provide products to the world at a competitive advantage resulting from lower costs and abundant raw materials. In this way, an upstream technology breakthrough has led to a downstream manufacturing renaissance.”
ExxonMobil is strategically investing in new refining and chemical-manufacturing projects in the U.S. Gulf Coast region to expand its manufacturing and export capacity. The company’s Growing the Gulf expansion program, consists of 11 major chemical, refining, lubricant and liquefied natural gas projects at proposed new and existing facilities along the Texas and Louisiana coasts. Investments began in 2013 and are expected to continue through at least 2022.
Woods said that ExxonMobil’s Gulf expansion projects are expected to provide long-term economic benefits to the region, noting the creation of direct employment opportunities and the multiplier effects of the company’s investments.
“Importantly, Growing the Gulf also creates jobs and lasting economic benefits for the communities where they’re located,” Woods said. “All told, we expect these 11 projects to create over 45,000 jobs. Many of these are high-skilled, high-paying jobs averaging about $100,000 a year. And these jobs will have a multiplier effect, creating many more jobs in the communities that service these new investments.”
According to the American Chemistry Council, chemical manufacturing is one of America’s top exporting industries, accounting for 14 percent of overall U.S. exports in 2015, and exports of specific chemicals linked to shale gas are projected to reach $123 billion by 2030. Most of ExxonMobil’s planned new chemical capacity investment in the Gulf region is targeted toward export markets in Asia and elsewhere.
“These projects are export machines, generating products that high-growth nations need to support larger populations with higher standards of living,” Woods said. “Those overseas markets are the motivation behind our investments. The supply is here; the demand is there. We want to keep connecting those dots.”
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is one of the largest refiners and marketers of petroleum products and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com or follow us on Twitter www.twitter.com/exxonmobil.
Coca-Cola Delivers Greater Variety to Brazilian Consumers with Slimmer Format Beverage Packaging From Crown
Philadelphia, PA — CROWN Embalagens Metálicas da Amazônia S.A. (CROWN Brazil), a joint venture of Crown Holdings, Inc. (NYSE: CCK) (Crown) (www.crowncork.com) and Évora S.A. of Porto Alegre, Brazil, has partnered with Coca-Cola to introduce a 220ml sleek style beverage can to local consumers. Produced at Crown’s plant in Cabreuva, the sleek style format addresses consumer demand for smaller portion sizes and greater product variety.
The functional and sophisticated format will be used for Coca-Cola lines: Coke Zero, Coke Life, Coca-Cola, Fanta, Grape Fanta, Sprite and Guaraná Kuat. It joins Coca-Cola’s line of standard 355ml and 250ml size beverage cans for soft drinks.
“Helping consumers experience our products in new ways remains a primary goal at Coca-Cola,” stated Mario Sergio Gomes, Global Procurement Director for Latin America. “Crown’s innovative 220ml beverage can format satisfies the preferences of modern Brazilian consumers while also adding noteworthy progression and variety to our product line.”
Like all aluminum cans, the 220ml can is infinitely recyclable, provides an effective barrier against light and oxygen, and has significant shelf life properties. The can size also meets consumer preferences in terms of it being lighter, easier to hold, transportable and faster to chill than larger sizes.
“Partnering with Coca-Cola to create a beverage package that not only gives consumers more options, but creates visual impact on the shelf and aligns with consumer demands was a win-win,” said Wilmar Arinelli, President, CROWN Embalagens Metálicas da Amazônia S.A. “We look forward to continued collaboration with Coca-Cola and other regional brands to meet the evolving needs of Brazilian consumers.”
The 220 ml sleek style beverage can brings CROWN Brazil’s portfolio to ten different sizes – the largest portfolio in the country. Other sizes available on the market are the 250ml slim style, 269ml, 310ml, 355ml and 425ml sleek style cans and 250ml, 355ml, 473ml and 550ml standard cans.
About Crown Holdings, Inc.
Crown Holdings, Inc., through its subsidiaries, is a leading supplier of packaging products to consumer marketing companies around the world. World headquarters are located in Philadelphia, PA. For more information, visit www.crowncork.com.
– See more at: http://www.crowncork.com/news/press-room/coca-cola-delivers-greater-variety-brazilian-consumers-slimmer-format-beverage#sthash.pDGmSteh.dpuf
Aluminium of Greece collaborates to drive efficiency using Predix*-based first-of-their-kind digital smelter solutions
Dubai, UAE; GE (NYSE: GE) and Aluminium of Greece (AOG), a Mytilineos Group subsidiary, today signed a 10-year agreement in Dubai, the United Arab Emirates, to implement global first-of-their-kind digital smelter solutions for AOG to enhance its aluminium smelting process and contribute to increased operational efficiency and productivity.
The digital solutions are a significant step in charting the next generation of smelting operations globally. The agreement was signed by Dimitris Stefanidis, CEO of Aluminium of Greece and Joseph Anis, President & CEO of GE’s Power Services business in the Middle East and Africa, in the presence of senior officials of both companies in Dubai.
“As the largest vertically integrated bauxite, alumina and aluminium production and trading unit in the European Union, we are constantly looking at innovative technologies to enhance our performance standards. The application of digital industrial solutions is a remarkable opportunity to achieve process optimization across our operations and to push productivity levels,” said Dimitris Stefanidis. “With GE’s digital smelter solutions, we are setting a global first for the aluminium industry that will contribute to our operational efficiency and set new benchmarks in the sector.”
Underlining GE’s strong global collaboration, digital strength and industrial know-how, the digital solutions for smelting operations are being created by a team of engineers and developers based in San Ramon, USA; GE Power’s Digital Smelter Center of Excellence (COE) in Dubai, UAE; and GE’s Global Research Center in Bangalore, India. The project will be executed by the team based at the COE in Dubai, while the facility that the solutions will be implemented at is located in Agios Nikolaos, Viotia, Greece.
“GE has been at the forefront of digitizing the future of industry globally and in the region, providing digital industrial solutions for power generation and the LNG industry, among others” said Joseph Anis. “By bringing together the strengths of our multi-locational teams and GE Power’s Digital Smelter Center of Excellence in Dubai, we will collaborate with AOG to create a new chapter in the history of smelting operations as well.”
GE has supported AOG’s growth and development over the decades, having supplied it with advanced technologies and signing multi-year agreements to cover the maintenance of gas turbines and associated generators.
The digital solutions will operate in the cloud, powered by Predix*, GE’s operating system for the Industrial Internet. Virtual sensors will facilitate the ongoing evaluation of parameters such as temperature and chemistry that are not ordinarily monitored continuously. This, in turn, will help to anticipate the health and condition of the pot, providing timely monitoring reports on the operations of the plant.
“We will be able to recreate an actual smelter using artificial intelligence and physics-based models,” stated Bhanu Shekhar, Chief Digital Officer for GE Power in the Middle East and Africa. “This is a living digital model that will continuously generate smelter data, and will be a game changer in helping to address the challenges of power usage and the consumption of raw materials in the smelting industry.”
“The application of the digital smelter solutions will contribute to the operational efficiency improvement of the Aluminium of Greece, by lowering raw materials’ consumption, decreasing energy consumption, and reducing pot leakages,” concluded Dimitris Stefanidis.
GE’s digital solutions for aluminium smelting can help unlock a new era of productivity for this critical industry in Europe, the Gulf Cooperation Council (GCC) and beyond. A one percent increase in efficiency of aluminium smelter operations can contribute to an annual global savings of US$970 million across the total cost of production, US$936 million in output increase, and US$464 million in operations and maintenance costs. In the GCC region alone, the same one percent increase translates into US$28 million in savings on operations and maintenance. Today, the region’s aluminium smelting industry accounts for up to ten percent of the world’s total production, and GE has a strong history of leadership in the sector to enhance competitiveness, efficiency and sustainability for customers.
-ends-
About Mytilineos Group:
Mytilineos Group is a leading Greek industry active in Metallurgy & Mines, Energy and EPC Projects. Established in Greece in 1990, the Group’s holding company, MYTILINEOS HOLDINGS S.A., is listed on the Athens Exchange, has a consolidated turnover in excess of €1.3 billion and employs directly or indirectly more than 2,700 people in Greece and abroad. www.mytilineos.gr
About GE:
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com
About GE Power:
GE Power is a world leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. We are transforming the electricity industry with the digital power plant, the world’s largest and most efficient gas turbine, full balance of plant, upgrade and service solutions as well as our data-leveraging software. Our innovative technologies and digital offerings help make power more affordable, reliable, accessible and sustainable. www.gepower.com. Follow us on Twitter @GE_Power.
CPSC Approves New Federal Safety Standard for Infant Sling Carriers
WASHINGTON, D.C. – To help keep infants and babies safe, the U.S. Consumer Product Safety Commission (CPSC) has approved a new federal mandatory standard intended to improve the safety of infant sling carriers and prevent deaths and injuries to young children.
Infant sling carriers are worn by the parent or caregiver and are designed to carry an infant/toddler in an upright or reclined position. Slings generally are intended for infants and toddlers between 8 and 35 pounds. Designs typically range from unstructured hammock-shaped products that suspend from the caregiver’s body, to long lengths of material or fabric that wrap around the caregiver’s body.
The new federal safety standard incorporates the most recent voluntary standard developed by ASTM International (ASTM F2907-15), Standard Consumer Safety Specification for Sling Carriers, with one modification regarding label attachments. CPSC’s rule modifies the ASTM standard to make warning labels more permanent by preventing the labels from being attached to the sling carrier along only one side of the label.
The mandatory standard contains several requirements for sling carriers including:
loading to ensure that the sling can carry up to three times the manufacturer’s maximum recommended weight,
structural integrity to ensure that after all testing, there are no seam separations, fabric tears, breakage, etc., and
occupant retention to prevent the child being carried from falling out of the sling during normal use.
In addition, the standard requires sling carriers to come with warning labels and instructional literature. These requirements include:
pictures to show the proper position of a child in the sling,
a warning statement about the suffocation hazard posed by slings and prevention measures,
warning statements about children falling out of slings, and
a reminder for caregivers to check the buckles, snaps, rings and other hardware to make sure no parts are broken.
Between January 2003 and September 2016, 159 incidents were reported to CPSC involving sling carriers; 17 were fatal and 142 were nonfatal. Of the 142 nonfatal incidents, 67 reports involved an injury to the infant during use of the product. Among the 67 reported nonfatal injuries, 10 involved hospitalizations.
The effective date for the new mandatory infant sling carrier standard is one year after the final rule is published in the Federal Register.
CPSC advises parents and caregivers to be cautious when using infant slings for babies younger than four months of age. Slings can pose two different types of suffocation hazards to babies.
In the first few months of life, babies cannot control their heads because of still developing neck muscles. The sling’s fabric can hold the baby in a position that blocks the baby’s breathing and rapidly suffocates a baby within a minute or two.
Additionally, where a sling keeps the infant in a curled position bending the chin toward the chest, the airways can be restricted, limiting the oxygen supply. The baby will not be able to cry for help and can slowly suffocate.
CPSC recommends the following tips to parents and caregivers when using infant sling carriers.
Make sure the infant’s face is not covered and is visible at all times to the sling’s wearer.
If nursing the baby in a sling, change the baby’s position after feeding so the baby’s head is facing up and is clear of the sling and the mother’s body.
Be vigilant about frequently checking their baby in a sling, always making sure nothing is blocking baby’s nose and mouth and baby’s chin is away from her chest.
The Commission is required by The Danny Keysar Child Product Safety Notification Act, Section 104(b) of the Consumer Product Safety Improvement Act of 2008 (CPSIA), to issue consumer product safety standards for durable infant or toddler products. In the past seven years, the Commission has approved new federal safety standards for durable infant or toddler products, including full-size cribs, non-full-size cribs, play yards, baby walkers, baby bath seats, children’s portable bed rails, strollers, toddler beds, infant swings, handheld infant carriers, soft infant carriers, framed infant carriers, bassinets, cradles and portable hook-on chairs.
The Commission voted 3-2 in favor of the standard on January 11, 2017.
The Coca-Cola Company and Anheuser-Busch InBev Reach Agreement Regarding Coca-Cola Beverages Africa
ATLANTA – BRUSSELS – The Coca-Cola Company (NYSE: KO) and Anheuser-Busch InBev (“AB InBev”) (Euronext: ABI) (NYSE: BUD) (MEXBOL: ANB) (JSE: ANH) have reached an agreement regarding the transition of AB InBev’s 54.5% equity stake in Coca-Cola Beverages Africa (“CCBA”) for 3.15 billion USD, after customary adjustments. CCBA includes the countries of South Africa, Namibia, Kenya, Uganda, Tanzania, Ethiopia, Mozambique, Ghana, Mayotte and Comoros.
In addition, the companies have reached an agreement in principle for The Coca-Cola Company to acquire AB InBev’s interest in bottling operations in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras for an undisclosed amount.
The transactions are subject to the relevant regulatory and minority approvals and are expected to close by the end of 2017.
The Coca-Cola Company plans to hold all of these territories temporarily until they can be refranchised to other partners. The Coca-Cola Company’s intent is to account for the acquired stakes as a discontinued operation for reporting purposes.
Carlos Brito, CEO of AB InBev, said: “We are happy that we have been able to reach this agreement with The Coca-Cola Company in a timely manner and with a satisfactory outcome for all parties.”
“We are pleased to have reached an agreement quickly that is in everyone’s best interests,” said Muhtar Kent, Chairman and CEO of The Coca-Cola Company. “We will move forward with our long-term strategic plan in these important growth markets. We are continuing negotiations with a number of parties who are highly qualified and interested in these bottling territories and look forward to refranchising these territories as soon as practical following regulatory approval.”
English, French and Dutch versions of this press release will be available on www.ab-inbev.com.
About Anheuser-Busch InBev
Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with secondary listings on the Mexico (MEXBOL: ANB) and South Africa (JSE: ANH) stock exchanges and with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD). Our dream is to bring people together for a better world. Beer, the original social network, has been bringing people together for thousands of years. We are committed to building great brands that stand the test of time and to brewing the best beers using the finest natural ingredients. Our diverse portfolio of well over 400 beer brands includes global brands Budweiser®, Corona® and Stella Artois®; multi-country brands Beck’s®, Castle®, Castle Lite®, Hoegaarden® and Leffe®; and local champions such as Aguila®, Antarctica®, Bud Light®, Brahma®, Cass®, Chernigivske®, Cristal®, Harbin®, Jupiler®, Klinskoye®, Michelob Ultra®, Modelo Especial®, Quilmes®, Victoria®, Sedrin®, Sibirskaya Korona® and Skol®. Our brewing heritage dates back more than 600 years, spanning continents and generations. From our European roots at the Den Hoorn brewery in Leuven, Belgium. To the pioneering spirit of the Anheuser & Co brewery in St. Louis, US. To the creation of the Castle Brewery in South Africa during the Johannesburg gold rush. To Bohemia, the first brewery in Brazil. Geographically diversified with a balanced exposure to developed and developing markets, we leverage the collective strengths of approximately 200,000 employees based in more than 50 countries worldwide. In 2015, on a combined pro forma basis, AB InBev realized 55.5 billion US dollar in revenues (excluding JVs and associates).
Visit us @ www.ab-inbev.com.
Like us @ www.facebook.com/abinbev.
Follow us @ twitter.com/abinbevnews.
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands and more than 3,800 beverage choices. Led by Coca-Cola, one of the world’s most valuable and recognizable brands, our company’s portfolio features 20 billion-dollar brands, 18 of which are available in reduced-, low- or no-calorie options. Our billion-dollar brands include Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani, vitaminwater, Powerade, Minute Maid, Simply, Del Valle, Georgia and Gold Peak. Through the world’s largest beverage distribution system, we are the No. 1 provider of both sparkling and still beverages. More than 1.9 billion servings of our beverages are enjoyed by consumers in more than 200 countries each day. With an enduring commitment to building sustainable communities, our company is focused on initiatives that reduce our environmental footprint, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. Together with our bottling partners, we rank among the world’s top 10 private employers with more than 700,000 system associates. For more information, visit Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at twitter.com/CocaColaCo, visit our blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at www.linkedin.com/company/ the-coca-cola-company.
Johnson Controls Expands Start-stop Battery Production In China To Meet Surging Market Demand
SHANGHAI — Johnson Controls, the global leader in automotive battery manufacturer, is expanding its production capacity of Absorbent Glass Mat (AGM) batteries for start-stop vehicles in China to support the rising market demand.
Johnson Controls recently launched new production lines for AGM batteries in its Changxing Plant, Zhejiang province facility. The plant’s current AGM battery capacity has been increased to over 3 million units a year, more than double the prior year capacity. The total annual capacity of the plant now reaches approximately 10 million batteries, making it Johnson Controls’ largest battery manufacturing facility in China. The AGM capacity expansion project is ongoing and expected to be completed in 2017. Over the next five years, Johnson Controls is investing $780 million to grow global production capacity for start-stop vehicle batteries.
“We see growing market demand for AGM batteries, as start-stop vehicles are getting more and more popular in China and around the world.” said Kenneth Yeng, vice president and general manager, Johnson Controls Power Solutions China. “By 2020, around 50 percent, or 15 million new vehicles annually will be equipped with start-stop functionality. We are adding the capacity to meet the market momentum while following our global manufacturing standards to ensure outstanding performance and quality.”
The company predicts that between 2016 and 2020, the global market will surge from 25 million to 65 million vehicles in North America, Europe and China. In China alone, start-stop penetration for new vehicle production is expected to be around 50 percent, driven by increasing fuel economy and greenhouse gas emission targets set by the government. Start-stop technology provides up to 5 percent fuel savings every time drivers fill up their gas tank. It is easy for automakers to apply to traditional internal combustion engines, and easy to use — no change in driving habits required. As the ideal energy storage solution for start-stop systems, Johnson Controls AGM batteries are engineered for superior starting power and improved performance, to achieve the fuel economy benefits, support more complicated power needs as well as to ensure a smooth driving experience of start-stop vehicles.
About Johnson Controls
Johnson Controls is a global diversified technology and multi industrial leader serving a wide range of customers in more than 150 countries. Our 117,000 employees create intelligent buildings, efficient energy solutions, integrated infrastructure and next generation transportation systems that work seamlessly together to deliver on the promise of smart cities and communities. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. We are committed to helping our customers win and creating greater value for all of our stakeholders through strategic focus on our buildings and energy growth platforms. For additional information, please visit http://www.johnsoncontrols.com or follow us @johnsoncontrols on Twitter.
About Johnson Controls Power Solutions
Johnson Controls Power Solutions is the world’s largest manufacturer of automotive batteries, supplying approximately 146 million every year to automakers and aftermarket retailers. Our full range of lead-acid and lithium-ion battery technology powers nearly every type of vehicle for our customers- including traditional, start-stop, micro-hybrid, hybrid and electric. Johnson Controls’ recycling system has helped make automotive batteries the most recycled consumer product in the world. Globally, 15,000 employees develop, manufacture, distribute and recycle batteries at more than 50 locations. For more information, please visit http://www.JohnsonControls.com/PowerSolutions or follow @JCI_BatteryBeat on Twitter.
GE Plans to Invest $1.4B to Acquire Additive Manufacturing Companies Arcam and SLM; Accelerates Efforts in Important Digital Industrial Space
BOSTON, MA (USA) – September 6, 2016 – GE (NYSE: GE), the world’s leading digital industrial company, today announced plans to acquire two suppliers of additive manufacturing equipment, Arcam AB and SLM Solutions Group AG for $1.4 billion. Both companies will report into David Joyce, President & CEO of GE Aviation. Joyce will lead the growth of these businesses in the additive manufacturing equipment and services industry. In addition, he will lead the integration effort and the GE Store initiative to drive additive manufacturing applications across GE.
“Additive manufacturing is a key part of GE’s evolution into a digital industrial company. We are creating a more productive world with our innovative world-class machines, materials and software. We are poised to not only benefit from this movement as a customer, but spearhead it as a leading supplier,” said Jeff Immelt, Chairman and CEO of GE. “Additive manufacturing will drive new levels of productivity for GE, our customers, including a wide array of additive manufacturing customers, and for the industrial world.”
GE expects to grow the new additive business to $1 billion by 2020 at attractive returns and also expects $3-5 billion of product cost-out across the company over the next ten years.
Arcam AB, based in Mölndal, Sweden, invented the electron beam melting machine for metal-based additive manufacturing, and also produces advanced metal powders. Its customers are in the aerospace and healthcare industries. Arcam generated $68 million in revenues in 2015 with approximately 285 employees. In addition to its Sweden site, Arcam operates AP&C, a metal powders operation in Canada, and DiSanto Technology, a medical additive manufacturing firm in Connecticut, as well as sales and application sites worldwide.
SLM Solutions Group, based in Lübeck, Germany, produces laser machines for metal-based additive manufacturing with customers in the aerospace, energy, healthcare, and automotive industries. SLM generated $74 million in revenues in 2015 with 260 employees. In addition to its operations in Germany, SLM has sales and application sites worldwide.
“Additive manufacturing fits GE’s business model to lead in technologies that leverage systems integration, material science, services and digital productivity,” said Joyce. “It will benefit from the GE Store and our core engineering capability.”
Arcam and SLM will bolster GE’s existing material science and additive manufacturing capabilities. GE has invested approximately $1.5 billion in manufacturing and additive technologies since 2010. The investment has enabled the company to develop additive applications across six GE businesses, create new services applications across the company, and earn 346 patents in powder metals alone. In addition, the additive manufacturing equipment will leverage Predix and be a part of our Brilliant Factory initiative.
“We chose these two companies for a reason,” said Joyce. “We love the technologies and leadership of Arcam AB and SLM Solutions. They each bring two different, complementary additive technology modalities as individual anchors for a new GE additive equipment business to be plugged into GE’s resources and experience as leading practitioners of additive manufacturing. Over time, we plan to extend the line of additive manufacturing equipment and products.”
The additive effort will utilize GE’s global ecosystem, but be centered in Europe. GE will maintain the headquarters locations and key operating locations of Arcam and SLM, as well as retain their management teams and employees. These locations will collaborate with the broader GE additive ecosystem including the manufacturing and materials research center in Niskayuna, New York, and the additive design and production lab in Pittsburgh, Pennsylvania. They will also complement the technologies brought on by other key acquisitions such as Morris Technologies and Rapid Quality Manufacturing.
Each acquisition is structured as a public tender offer for all of the outstanding shares of stock of each company. The closing of each public tender offer is subject to various conditions, including minimum acceptance thresholds and regulatory approvals. GE is in the process of making the necessary filings with authorities with respect to such tender offers, and, upon approval, the documents will be made publicly available.
Additive manufacturing (also called 3D printing) involves taking digital designs from computer aided design (CAD) software, and laying horizontal cross-sections to manufacture the part. Additive components are typically lighter and more durable than traditionally-manufactured parts because they require less welding and machining. Because additive parts are essentially “grown” from the ground up, they generate far less scrap material. Freed of traditional manufacturing restrictions, additive manufacturing dramatically expands the design possibilities for engineers. “Additive provides a new palette for engineers to create. Parts are also being designed in GE Power, Oil & Gas, Healthcare and across GE’s services businesses,” said Joyce. “We see value potential to reduce product cost and improve NPI spend. Ultimately, as we develop more productive machines, we can build additive manufacturing ‘as a service’ for our customers.”
In July, GE Aviation introduced into airline service its first additive jet engine component – complex fuel nozzle interiors – with the LEAP jet engine. The LEAP engine is the new, best-selling engine from CFM International, a 50/50 joint company of GE and Safran Aircraft Engines of France. More than 11,000 LEAP engines are on order with up to 20 fuel nozzles in every engine, thus setting the stage for sustainably high and long-term additive production at GE Aviation’s Auburn, Alabama, manufacturing plant. Production will ramp up to more than 40,000 fuel nozzles using additive by 2020. GE Aviation is also using additive manufacturing to produce components in its most advanced military engines. In the general aviation world, GE is developing the Advanced Turboprop Engine (ATP) for a new Cessna aircraft with a significant portion of the entire engine produced using additive manufacturing.
“GE’s aspirations in additive fits our long-term business model. We have world-class industrial businesses that leverage systems integration, material sciences, services and Predix,” said Immelt. “We want all of our businesses to leverage the GE Store, promote digital differentiation, and drive productivity for GE and our customers. We are excited about the opportunity.”
GE will host an investor call at 8:30AM ET to discuss these transactions. To tune in and access additional documents visit www.ge.com/investor.
About GE
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com
GE Aviation, an operating unit of GE, is a world-leading provider of jet engines, components and integrated systems for commercial and military aircraft. GE Aviation has a global service network to support these offerings. For more information, visit us at www.geaviation.com.
Saudi Aramco signs MoU with GE and Cividale SpA To Set Up High-end Forging & Casting Manufacturing Facility in the Kingdom
Dahran, Saudi Arabia; Saudi Aramco has signed a Memorandum of Understanding (MoU) with GE (NYSE: GE) and Cividale SpA of Italy to build the Middle East and North Africa’s first-of-its-kind high-end forging & casting manufacturing facility that will serve the region’s maritime and energy industries.
Marking a joint investment of over US$400 million (SAR1.5 billion), the new facility, to be located in Ras Al-Khair under the Royal Commission of Jubail and Yanbu industrial area, aims to establish a high-value supply chain that boosts exports and economic competitiveness. Set to be operational in 2020, the plant will create 2,000 quality jobs in the Kingdom and catalyze the growth of Saudi small and medium enterprises (SMEs).
The MoU follows a preliminary partnership between Saudi Aramco and Cividale, a leading European producer in the steel and cast iron sector, to conduct feasibility studies for forging and casting manufacturing services in the Kingdom. GE has come on board to extend its expertise and investment in developing the world-class manufacturing plant through a joint venture between the three entities.
The Forging & Casting Manufacturing Facility complements plans by Saudi Aramco to develop several industrial projects in the Kingdom including a maritime project focused on building, maintenance, repair and overhaul (MRO) of offshore platforms, jack-ups, offshore service vessels and commercial tankers.
Saudi Aramco is also working with its partners to develop an onshore rig manufacturing facility for providing new build and MRO services to onshore rigs and systems; an engine manufacturing project for the manufacturing, maintenance and repair of diesel engines, manufacturing and repair of marine pumps; and an Energy Industrial City to accelerate manufacturing industries in the oil and gas sector.
The Forging & Casting Manufacturing Facility will serve all these projects in addition to providing the best-in-class services and technologies to downstream & other industries across the region and global markets. It will also support the ongoing emphasis of the government, under Saudi Vision 2030, to develop the mining sector of the Kingdom by creating a domestic source-market for various raw materials & supplies that go into the production line.
Abdallah I. Al-Saadan, Senior Vice President, Finance, Strategy & Development, Saudi Aramco, said: “The MoU reflects our ambition to create a robust supply chain that builds positive synergies in the oil and gas manufacturing sector. This builds on our deep commitment to support the goals of Saudi Vision 2030 to promote economic and industrial diversification in the Kingdom and boost localized manufacturing.”
Rami Qasem, President & CEO, GE Oil & Gas, Middle East, North Africa & Turkey said: “For the Forging & Casting Manufacturing Facility, we will leverage our already strong expertise in ‘Made in Saudi’ manufacturing. Together with our partners, we will actively engage Saudi SMEs to support the plant’s operations, and train & hire Saudi professionals, adding further value to the economy. By building a domestic forging and casting production unit, Saudi and regional customers can achieve greater operational efficiencies in product procurement, repair and service support.”
Antonio Valduga, President of Cividale, added: “The feasibility assessment study underlines the strong potential for a world-class manufacturing facility for forging and casting services in the Kingdom. Developing a full-fledged facility through the joint partnership will position Saudi Arabia as a technology and services hub for specialized equipment and services.”
The collaboration is a strong example of the public-private partnerships that the government fosters under Saudi Vision 2030 to develop local manufacturing capabilities that add significant value to the economy.
-ends-
About Saudi Aramco:
Saudi Aramco is a world leader in integrated energy and chemicals. We are driven by the core belief that energy is opportunity. From producing approximately one in every eight barrels of the world’s crude oil supply to developing new energy technologies, our global team is dedicated to creating positive impact in all that we do. We focus on making our resources more sustainable and more useful. This promotes long-term economic growth and prosperity around the world. www.saudiaramco.com
About GE:
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com
About Cividale SpA:
Cividale Group is located in a strategic position near to the most important European markets. Our shops are all laying in the North-East of Italy. There is a high integration between the different companies within the Group; this allows Cividale Spa to properly answer to the customers’ requirements offering the widest possible range of products.
Major Bottler Arca Continental to Join U.S. Coca-Cola System Through New Agreements With The Coca-Cola Company
ATLANTA – The Coca-Cola Company today announced that it has signed letters of intent to refranchise bottling operations that serve a large area of the United States.
The transactions include territories in Texas and parts of Oklahoma, New Mexico and Arkansas, which is an area currently known as the Southwest operating unit of Coca-Cola Refreshments (CCR).
Under letters of intent announced today, The Coca-Cola Company will contribute the Southwest operating unit, including distribution and production operations, in exchange for a 20% equity stake in a new, privately held entity. This entity, AC Beverages, will also include all of Arca Continental’s existing beverage businesses in Latin America. Arca Continental, which is based in Monterrey, Mexico, will continue to be publicly traded on the Mexican Stock Exchange.
Coca-Cola Bottling Company UNITED, based in Birmingham, Ala., will become a joint-venture partner in the U.S. operations of AC Beverages. Arca Continental will have the majority stake in this U.S. joint venture, where both companies will work hand-in-hand with local teams in a solid partnership to benefit the important markets in which they participate.
UNITED will acquire from The Coca-Cola Company the majority of its remaining territory in Oklahoma. UNITED will contribute that territory, along with cash, to its U.S. joint venture with AC Beverages. UNITED will continue to independently operate all of its other territories, which are outside of its joint venture with AC Beverages.
Separately, Ozarks Coca-Cola Bottling Company of Springfield, Mo., has signed a letter of intent to acquire territories owned by The Coca-Cola Company in northwest Arkansas and small areas in Kansas and Oklahoma.
The letters of intent announced today mark another key milestone as The Coca-Cola Company continues to refranchise Company-owned North American bottling territories. This work is expected to be completed by the end of 2017.
“These are important agreements that will bring a valued, new partner into the U.S. Coca-Cola system,” said J. Alexander “Sandy” Douglas Jr., President, Coca-Cola North America. “Arca Continental is a strong Coca-Cola bottler that has done a great job developing and sharing best practices in its long-standing history. Arca Continental will be a tremendous partner with UNITED in serving a major region of the United States, and the companies will benefit from having contiguous borders for their territories. The Coca-Cola Company is also pleased to gain an additional equity stake in an international bottler that is vital to our long-term success.”
Currently, Arca Continental is the second-largest Coca-Cola bottler in Latin America and the third-largest independent bottler in the world in terms of unit case volume.
“These initial agreements with The Coca-Cola Company and Coca-Cola Bottling Company UNITED, recognized by its outstanding performance in the U.S. market, strengthen Arca Continental’s commitment to create value in the sustainable and profitable way that has distinguished us throughout our history,” said Manuel L. Barragan Morales, Chairman of the Board of Arca Continental. “Led by proven leadership from across our organizations, together we will be well-positioned to further enhance service to the customers and consumers in a region of great importance for the Coca-Cola system, while driving profitable growth in multiple beverage categories.”
“UNITED is very excited to join with Arca Continental – a partner for whom we have great respect – in this new joint venture that combines our experience, global best practices and locally-focused operating strategy with CCR’s very capable and committed local operating teams,” said Claude Nielsen, Chairman of Coca-Cola Bottling Company UNITED. “These franchises in Texas, Oklahoma, New Mexico and Arkansas bring very dynamic markets with strong potential for growth.”
The AC Beverages/UNITED joint venture will be based in the United States. It will become a member of the National Product Supply Group (NPSG). The NPSG, as previously announced, will administer key activities for member bottlers, including production of cold-fill beverages. The NPSG is governed by a board comprised of representatives from its current members, which are Coca-Cola North America,
Coca-Cola Refreshments, Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Company UNITED and Swire Coca-Cola, USA.
The AC Beverages/UNITED joint venture will own 11 cold-fill production facilities. Nine are in Texas. Those facilities are located in El Paso, Dallas, Fort Worth, San Antonio, McAllen, Abilene and Nacogdoches, plus two in Houston. The other two facilities are in Oklahoma City and Okmulgee, Okla.
21st Century Beverage Partnership Model History
In North America, The Coca-Cola Company began working with its bottling partners a decade ago on plans to develop a model that evolves the system to serve the changing customer and consumer landscape, with a focus on creating stronger system alignment. A critical step was the Company’s acquisition of the North American territories of Coca-Cola Enterprises in 2010.
Since that deal closed, The Coca-Cola Company has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.
Ultimately, the Coca-Cola system in North America will be comprised of economically aligned bottling partners that have the capability to serve major customers, coupled with the ability to maintain strong, local ties across diverse markets in the United States and Canada.
So far, the Company has reached definitive agreements or signed letters of intent to refranchise territories that account for approximately 60% of bottler-delivered distribution volume and 41 of the 51 cold-fill production facilities in the United States. The Company expects to complete its North American refranchising initiative by the end of 2017.
The new transactions announced today are subject to The Coca-Cola Company and the companies involved reaching definitive agreements. The proposed transactions between The Coca-Cola Company and Arca Continental, as well as the joint venture between Arca Continental and Coca-Cola Bottling Company UNITED, are subject to approval of AC’s shareholders, the obtaining of regulatory approvals and other customary conditions. The parties are committed to working together to implement a smooth transition with minimal disruption for customers, consumers and system associates. Financial terms are not being disclosed. The transactions are expected to close in the first half of 2017.
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands and more than 3,800 beverage choices. Led by Coca-Cola, one of the world’s most valuable and recognizable brands, our company’s portfolio features 20 billion-dollar brands, 18 of which are available in reduced-, low- or no-calorie options. Our billion-dollar brands include Diet Coke, Coca-Cola Zero, Fanta, Sprite, Dasani, vitaminwater, Powerade, Minute Maid, Simply, Del Valle, Georgia and Gold Peak. Through the world’s largest beverage distribution system, we are the No. 1 provider of both sparkling and still beverages. More than 1.9 billion servings of our beverages are enjoyed by consumers in more than 200 countries each day. With an enduring commitment to building sustainable communities, our company is focused on initiatives that reduce our environmental footprint, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. Together with our bottling partners, we rank among the world’s top 10 private employers with more than 700,000 system associates. For more information, visit
Coca-Cola Journey at www.coca-colacompany.com, follow us on Twitter at twitter.com/CocaColaCo, visit our blog, Coca-Cola Unbottled, at www.coca-colablog.com or find us on LinkedIn at www.linkedin.com/company/the-coca-cola-company.
Alcoa Reaches Power Agreement to Improve Competitiveness of Intalco Smelter
NEW YORK– Lightweight metals leader Alcoa (NYSE:AA) today announced it has reached an agreement with the Bonneville Power Administration (BPA) that will help improve the competitiveness of its Intalco smelter. As a result, the smelter will not curtail at the end of the second quarter as previously announced by the Company.
The amendment to the power contract is effective July 1, 2016 through Feb. 14, 2018 and provides for additional access to market power during this period.
This short-term amendment with BPA, combined with the state of Washington’s $3 million budget proviso for workforce training, are key factors in helping Intalco remain competitive. Alcoa thanks Governor Inslee; its federal delegation led by Senators Murray and Cantwell, and Representatives DelBene and Larsen; the state legislative delegation led by Senators Ranker and Ericksen; and BPA for their support.
Intalco Works, located in Washington State, has a capacity of 279,000 metric tons per year.
About Alcoa
A global leader in lightweight metals technology, engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our approximately 58,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoa and follow us on Facebook at www.facebook.com/Alcoa.
3M and the United Nations’ 2030 Agenda for Sustainable Development
At 3M we use science to solve problems. It’s in our DNA. We view global challenges as opportunities to innovate and we are proud to be part of a global solution.
At 3M, we framed our 2025 sustainability goals around shared global challenges. Our ambition, working collaboratively, is to realize a world where every life is improved – where natural resources are reliably available, people everywhere have access to education and opportunity, and communities are safe, healthy, connected and thriving.
17 Sustainable Development Goals
On September 25, 2015, the United Nations released the 2030 Agenda for Sustainable Development, including 17 Sustainable Development Goals designed to build upon the historic work of the Millennium Development Goals and stimulate important action in three dimensions of sustainable development: economic, social, and environmental.
Below are just a few of the ways our goals at 3M are #improvinglives in accordance with, and in support of the 2030 Sustainable Development Goals.
Respect our planet’s resources and reimagine waste as a nutrient to ensure we have abundance for future generations.
Goal: Invest to develop more sustainable materials and products to help our customers reach their environmental goals.
Goal: Reduce manufacturing waste by an additional 10%, indexed to sales.
Goal: Achieve “zero landfill” status at more than 30% of manufacturing sites.
Goal: Drive supply chain Sustainability through targeted raw material traceability and supplier performance assurance.
Promote clean water for everyone, everywhere so that every person, business and community has the water they need to thrive.
Goal: Reduce global water use by an additional 10%, indexed to sales.
Goal: Engage 100% of water-stressed/scarce communities where 3M manufactures on community-wide approaches to water management.
Transform the way the world uses energy because it impacts the climate, and the climate impacts everyone.
Goal: Improve energy efficiency indexed to net sales by 30%.
Goal: Increase renewable energy to 25% of total electricity use.
Goal: Ensure GHG emissions at least 50% below our 2002 baseline, while growing our business.
Goal: Help our customers reduce their GHGs by 250 million tons of CO2 equivalent emissions through use of 3M products.
Improve the health and safety of people worldwide so we can all focus on what matters most to us.
Goal: Provide training to 5 million people globally on worker and patient safety. Proper use of health and safety products is critical to infection prevention, personal safety and overall health. Building on our existing customer education program, we seek to help educate individuals on worker and patient safety in both healthcare and industrial settings.
Support empowerment and enrichment to provide people everywhere the opportunity to live life to its fullest.
Goal: Invest cash and products for education, community and environmental programs.
Goal: 100% participation in employee development programs to advance individual and organizational capabilities.
Goal: Double the pipeline of diverse talent in management to build a diverse workforce.
For more information on sustainability at 3M, please visit 3m.com/sustainability
Alcoa Launches Four New Specialty Alloys that Deliver Lightweight, High-performance Solutions to Meet Growing Automotive Demand
NEW YORK and COLUMBUS, OH, – Lightweight, high-performance metals leader Alcoa (NYSE:AA) today launched a family of innovative foundry alloys designed to meet the growing need for both part performance and lightweighting in the automotive industry and beyond.
The new alloys – SupraCast™, EZCast™, VersaCast™ and EverCast™ – have undergone extensive trials with major automakers and their suppliers, beating customers’ expectations on strength, thermal performance and corrosion resistance. Compared to incumbent material, they are stronger, lighter weight, and offer at least 20% better fatigue resistance.
“Our expert metallurgists combined with our deep understanding of the automotive industry allow us to anticipate and meet customer needs quickly and effectively,” said Tim Reyes, President of Alcoa Casting. “With this portfolio of patented alloys, we are enabling OEMs and foundries to tailor their parts to meet specific performance objectives—with material that weighs less and performs better than what is currently being used,” he added.
Eck Industries, a premium aluminum castings supplier, is a strong advocate for the new alloys. The company has successfully deployed VersaCast in collaboration with a supplier of cast parts to the motorsports industry and is working with Michigan-based technology development company REL, Inc., for a conformable compressed natural gas (CNG) tank that fits under the vehicle frame, rather than taking up cargo space. The tank was just named “Best in Class” for 2015 by Modern Casting magazine. In addition, Eck Industries has recently completed the casting of engine cylinder heads made from SupraCast, which were successfully tested for force, power and speed, resulting in an order for cast heads using this high performance alloy.
“These foundry alloys from Alcoa open the door to a whole new world of high-performance, lightweight solutions for our customers,” said Andrew Halonen, Sales Engineer of Eck Industries. “The alloys not only perform better than existing materials, they are easy to cast, even for highly complex parts. And that adds value throughout the supply chain,” he added.
Compared to the incumbent material, Alcoa’s new foundry alloys perform exceptionally well across applications currently cast in heavier metals, such as engine components and other critical structural parts. VersaCast, for example, is 40-50% the weight of cast iron, with 50% better resistance to fatigue, making it ideal for the most demanding structural applications. All of the new specialty alloys offer good to excellent castability, weldability and corrosion resistance.
In North America, SupraCast and EZCast have been successfully produced and sold, and both VersaCast and EverCast are currently being qualified by customers. In Europe, EZCast, SupraCast and VersaCast are commercially available.
Announced today at the American Foundry Society’s 119th Metalcasting Congress at the Greater Columbus Convention Center, Alcoa’s four new specialty alloys are each highly customizable with unique benefits:
SupraCast™ – Superior strength at elevated temperatures for high performance power train applications, SupraCast offers thermal conductivity combined with high structural integrity ideal for cylinder heads, connecting rods, turbo chargers, brake calipers, and engine blocks.
EZCast™ – Appreciable yield strength and elongation gains compared to traditional alloys in this space, EZCast is named for the high fluidity, thermal stability and low shrinkage that make it easy to cast and ideal for a variety of different, crash-resistant structural components, including, engine cradles, cross-members, side doors, radiator mounting, engine mounts, sub-frames and shock towers.
VersaCast™ – Outperforming cast iron up to 94% and typical aluminum alloy alternatives by at least 40%, VersaCast is designed to help OEMs achieve optimal performance in the most demanding structural applications while continuing to make vehicles lighter. VersaCast is suitable for automotive, aerospace or military components where high strength is required; its excellent castability allows for complicated shapes.
EverCast™ – A high strength and high fatigue resistant alloy, EverCast is optimized for safety critical components in braking, steering and suspension brackets.
About Alcoa
A global leader in lightweight metals technology, engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high-performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our approximately 59,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter atwww.twitter.com/Alcoa and follow us on Facebook atwww.facebook.com/Alcoawww.facebook.com/Alcoa.
Alcoa to Delay Curtailment of Intalco Smelter
NEW YORK– Lightweight metals leader Alcoa (NYSE:AA) today announced it will delay the curtailment of its Intalco Works smelter in Ferndale, Washington until the end of the second quarter of 2016. The plant was initially scheduled to curtail by the end of the first quarter.
The Company announced a full curtailment of the Intalco smelter (230kmt) on November 2, 2015, with the plant’s casthouse continuing to operate. However, recent changes in energy and raw material costs have made it more cost effective in the near term to keep the smelter operating to provide molten metal to the plant’s casthouse.
Once all announced curtailments and closures are complete, the Company will have removed approximately 25 percent operating smelting capacity and approximately 20 percent of operating refining capacity by mid-2016, and Alcoa globally will have 2.1 million metric tons of operating smelting capacity and 12.3 million metric tons of operating refining capacity remaining.
About Alcoa
A global leader in lightweight metals technology, engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our approximately 60,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoa and follow us on Facebook at www.facebook.com/Alcoa.
Two Beverage Giants SABMiller and Anheuser-Busch InBev Agreement in Principle and Extension of PUSU deadline
The Boards of AB InBev (Euronext: ABI) (NYSE: BUD) and SABMiller (LSE: SAB) (JSE: SAB) announce that they have reached agreement in principle on the key terms of a possible recommended offer to be made by AB InBev for the entire issued and to be issued share capital of SABMiller (the “Possible Offer”).
Terms of Possible Offer
Under the terms of the Possible Offer, SABMiller shareholders would be entitled to receive GBP 44.00 per share in cash, with a partial share alternative (“PSA”) available for approximately 41% of the SABMiller shares.
The all-cash offer represents a premium of approximately 50% to SABMiller’s closing share price of GBP 29.34 on 14 September 2015 (being the last business day prior to renewed speculation of an approach from AB InBev).
The PSA consists of 0.483969 unlisted shares and GBP 3.7788 in cash for each SABMiller share, equivalent to a value of GBP 39.03 per SABMiller share on 12 October 2015, representing a premium of approximately 33% to the closing SABMiller share price of GBP 29.34 as of 14 September 2015. Further details of the PSA are set out below.
In addition, under the Possible Offer, SABMiller shareholders would be entitled to any dividends declared or paid by SABMiller in the ordinary course in respect of any completed six-month period ended 30 September or 31 March prior to completion of the possible transaction, which shall not
exceed USD 0.2825 per share for the period ended 30 September 2015 and a further USD 0.9375 per share for the period ended 31 March 2016 (totalling USD 1.22 per share) and shall not exceed an amount to be agreed between AB InBev and SABMiller in respect of periods thereafter (which shall be disclosed in any announcement of a firm intention to make an offer).
The Board of SABMiller has indicated to AB InBev that it would be prepared unanimously to recommend the all-cash offer of GBP 44.00 per SABMiller share to SABMiller shareholders, subject to their fiduciary duties and satisfactory resolution of the other terms and conditions of the Possible Offer.
Antitrust and reverse break fee
In connection with the Possible Offer, AB InBev would agree to a “best efforts” commitment to obtain any regulatory clearances required to proceed to closing of the transaction. In addition, AB InBev would agree to a reverse break fee of USD 3 billion payable to SABMiller in the event that
the transaction fails to close as a result of the failure to obtain regulatory clearances or the approval of AB InBev shareholders.
Pre-conditions
The announcement of a formal transaction would be subject to the following matters:
a) unanimous recommendation by the Board of SABMiller in respect of the all-cash offer, and the execution of irrevocable undertakings to vote in favour of the transaction from members of the SABMiller Board, in a form acceptable to AB InBev;
b) the execution of irrevocable undertakings to vote in favour of the transaction and to elect for the PSA from SABMiller’s two major shareholders, Altria Group, Inc. and BevCo Ltd., in each case in respect of all of their shareholding and in a form acceptable to AB InBev and SABMiller;
c) the execution of irrevocable undertakings to vote in favour of the transaction from AB InBev’s largest shareholders, the Stichting Anheuser-Busch InBev, EPS Participations SaRL and BRC SaRL in a form acceptable to AB InBev and SABMiller;
d) satisfactory completion of customary due diligence; and e) final approval by the Board of AB InBev.
The Board of AB InBev fully supports the terms of this Possible Offer and expects (subject to the matters above) to give its formal approval immediately prior to announcement.
AB InBev reserves the right to waive in whole or in part any of the pre-conditions to making an offer set out in this announcement, other than c) above which will not be waived. The conditions of the transaction will be customary for a combination of this nature, and will include approval by both companies’ shareholders and receipt of antitrust and regulatory approvals.
In view of the timetable for obtaining some of these approvals, AB InBev envisages proceeding by way of a pre-conditional scheme of arrangement in accordance with the Code.
The cash consideration under the transaction would be financed through a combination of AB InBev’s internal financial resources and new third party debt.
Further details of the PSA
The PSA comprises up to 326 million shares, which will be available for approximately 41% of the SABMiller shares. These shares would take the form of a separate class of AB InBev shares (the “Restricted Shares”)1 , with the following characteristics:
Unlisted and not admitted to trading on any stock exchange;
Subject to a five-year lock-up from closing;
Convertible into AB InBev ordinary shares on a one for one basis after the end of that five year period;
Ranking equally with AB InBev ordinary shares with regards to dividends and voting rights; and
Director nomination rights.
SABMiller shareholders who elect for the partial share alternative will receive 0.483969 Restricted Shares2 and GBP 3.7788 in cash for each SABMiller share.
Extension of the PUSU deadline
In accordance with Rule 2.6(a) of the Code, AB InBev was required, by not later than 5.00 pm on 14 October 2015, to either announce a firm ntention to make an offer for SABMiller in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for SABMiller, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies.
In accordance with Rule 2.6(c) of the Code, the Board of SABMiller has requested that the Panel on Takeovers and Mergers (the “Panel”) extends the relevant deadline, as referred to above, to enable the parties to continue their talks regarding the Possible Offer. In the light of this request,
an extension has been granted by the Panel and AB InBev must, by not later than 5.00 pm on 28 October 2015, either announce a firm intention to make an offer for SABMiller in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for SABMiller, in which
case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the Code.
AB InBev reserves the following rights:
a) to introduce other forms of consideration and/or to vary the composition of consideration;
b) to implement the transaction through or together with a subsidiary of AB InBev or NewCo or a company which will become a subsidiary of AB InBev or NewCo;
c) to make an offer (including the all-cash offer and PSA) for SABMiller at any time on less favourable terms:
(i) with the agreement or recommendation of the Board of SABMiller;
(ii) if a third party announces a firm intention to make an offer for SABMiller on less favourable terms; or
(iii) following the announcement by SABMiller of a whitewash transaction pursuant to the Code; and
d) to reduce its offer (including the all-cash offer and PSA) by the amount of any dividend that is announced, declared, made or paid by SABMiller prior to completion, save for ordinary course dividends declared or paid prior to completion, which shall not exceed USD 0.2825 per share for the period ended 30 September 2015 and a further USD 0.9375 per share for the period ended 31 March 2016 (totalling USD 1.22 per share) and shall not exceed an amount to be agreed between AB InBev and SABMiller in respect of periods thereafter (which shall be disclosed in any announcement of a firm intention to make an offer).
The announcement does not constitute an offer or impose any obligation on AB InBev to make an offer, nor does it evidence a firm intention to make an offer within the meaning of the Code. There can be no certainty that a formal offer will be made.
Alcoa to Separate into Two Industry-Leading Public Companies, Completing Successful Multi-Year Transformation
NEW YORK- Lightweight metals leader Alcoa (NYSE:AA) is today announcing that its Board of Directors has unanimously approved a plan to separate into two independent, publicly-traded companies, culminating Alcoa’s successful multi-year transformation. The separation will launch two industry-leading, Fortune 500 companies. The globally competitive Upstream Company will comprise five strong business units that today make up Global Primary Products – Bauxite, Alumina, Aluminum, Casting and Energy. The innovation and technology-driven Value-Add Company will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions. The transaction is expected to be completed in the second half of 2016. At that point Alcoa shareholders will own all of the outstanding shares of both the Upstream and Value-Add Companies. The separation is intended to qualify as a tax-free transaction to Alcoa shareholders for U.S. federal income tax purposes.
Both independent companies will attract an investor base best suited to their unique value proposition and operational and financial characteristics. Both entities will be capitalized prudently, with the Value-Add Company targeting an investment grade rating and the Upstream Company a strong non-investment grade rating. After the separation, the Upstream Company, with its strong history in the aluminum and alumina markets, will operate under the Alcoa name. The Value-Add Company will be named prior to closing.
“In the last few years, we have successfully transformed Alcoa to create two strong value engines that are now ready to pursue their own distinctive strategic directions,” said Klaus Kleinfeld, Chairman and Chief Executive Officer. “After steering the Company through the deep downturn of 2008, we immediately went to work reshaping the portfolio. We have repositioned the upstream business; we have an enviable bauxite position and are unrivalled in Alumina, we have optimized Aluminum, flexed our energy assets, and turned our casthouses into a commercial success story. The upstream business is now built to win throughout the cycle. Our multi-material value-add business is a leader in attractive growth markets. We have intensified innovation, made successful acquisitions, shed businesses without product differentiation, invested in smart organic growth, expanded our multi-materials profile and brought key technologies to market; all while significantly increasing profitability.”
Mr. Kleinfeld concluded, “Inventing and reinventing has defined our Company throughout its 126-year history. With the unanimous support of Alcoa’s Board we now take the next step; launching two leading-edge companies, each with distinct and compelling opportunities, and each ready to seize the future.”
Management Structure and Governance
Upon completion of the transaction, Klaus Kleinfeld will lead the Value-Add Company as Chairman and Chief Executive Officer. He will also serve as Chairman of the Upstream Company for the critical initial phase, ensuring a smooth and effective transition. Each company will have its own independent board of directors that will include members of the current Alcoa Board. Full management teams and boards for both companies will be named in the months leading up to the launch of the two companies in the second half of 2016.
The Upstream Company
After the separation, the Upstream Company will be a cost-competitive industry leader in bauxite mining, alumina refining and aluminum production, positioned for success throughout the market cycle. The company’s footprint will include 64 facilities worldwide, and approximately 17,000 employees. Revenues for the 12 months through June 30, 2015 totaled $13.2 billion, with $2.8 billion in EBITDA. It will be committed to disciplined capital allocation and prudent return of capital to shareholders.
Global aluminum demand is expected to grow 6.5 percent in 2015 and double between 2010 and 2020; so far this decade, global demand growth is tracking ahead of this projection. The Upstream Company will be well-positioned to meet this robust demand.
The Upstream Company’s world-class asset base will include the world’s largest bauxite mining portfolio, with 46 million bone dry metric tons of production in 2014. It has a low 19th percentile position on the global bauxite cost curve. With proximity to owned refinery operations, its mining reserves will provide a consistent supply of low-cost bauxite. Alcoa has been building its third-party bauxite business and is well-positioned to meet growing global demand.
The Upstream Company’s alumina refining system will be the world’s largest, with operations well positioned to serve major adjacent growth markets in Asia, the Middle East, and Latin America. It has a 25th percentile, first quartile position on the global alumina cost curve, with a target to reach the 21st percentile by 2016.
The company will be the world’s fourth largest aluminum producer with a highly competitive second quartile cost curve portfolio. It will have an unrivalled value-add casthouse network in close proximity to customers, and a substantial portfolio of energy assets with power production capacity of approximately 1,550 megawatts with operational flexibility to profit from market cyclicality.
Alcoa has aggressively reshaped its Alumina and Primary Metals segments, closing, divesting or curtailing 1.4 million metric tons, or 33 percent, of total smelting operating capacity since 2007. As a result, Alcoa has dropped eight points on the global aluminum cost curve since 2010 to the 43rd percentile, and is targeting the 38th percentile by 2016. Additionally, Alcoa has secured approximately 75 percent of smelter power needs through 2022.
Alcoa has also steadily grown its offering of differentiated, value-add aluminum products that are cast into specific shapes to meet the needs of customers. The Company has grown total value-add product shipments from its smelters from 57 percent in 2010 to 65 percent in 2014, delivering $1.3 billion in total incremental margin. In 2015, value-add products are projected to represent approximately 70 percent of smelter shipments. Alcoa has also invested in the most advanced, low cost integrated aluminum complex in the world in Saudi Arabia, with the refinery and smelter now fully operational. Alcoa reformed pricing in the alumina market in 2010 by introducing the Alumina Price Index (API) to sell smelter-grade alumina based on alumina market fundamentals rather than London Metal Exchange pricing. In 2014, 68 percent of Alcoa’s total third-party smelter-grade alumina shipments were based on API/spot market pricing. That is projected to grow to approximately 75 percent in 2015. Additionally, the Upstream business has achieved productivity gains of approximately $3.9 billion between 2009 and 2014.
The Value-Add Company
After the separation, the Value-Add Company will be a premier provider of high-performance multi-material products and solutions with 157 globally diverse operating locations and approximately 43,000 employees. Pro-forma revenues for the Value-Add Company for the 12 months through June 30, 2015 totaled $14.5 billion, with $2.2 billion in pro-forma EBITDA.
As Alcoa has transformed, EBITDA margins for the value-add portfolio have increased from 8 percent in 2008 to 15 percent in 2015 on a pro-forma basis for the twelve months through June 30, 2015. The overall contribution of the value-add portfolio to Alcoa’s after-tax operating income has more than doubled from 25 percent in 2008 to 51 percent in 2014. EBITDA margins in the combined downstream segments (Engineered Products and Solutions and Transportation and Construction Solutions) have increased from 14.6 percent in 2008 to 20.9 percent in 2014, and in the midstream (Global Rolled Products) from $108 per metric ton in 2008 to $289 per metric ton in 2014.
The Value-Add Company will be positioned for profitable growth by increasing share in fast growing end markets and leveraging significant customer synergies across the midstream and downstream portfolios. The company will be a differentiated supplier to the high-growth aerospace industry with leading positions on every major aircraft and jet engine platform, underpinned by market leadership in jet engine and industrial gas turbine airfoils, and aerospace fasteners. Approximately 40 percent of the company’s pro-forma revenues for the 12 months through June 30, 2015 came from the aerospace market. The company will also be at the forefront of capturing demand for aluminum intensive vehicles through Alcoa’s recent rolling mill capacity expansions and the commercialization of breakthrough technologies such as the Micromill. Automotive revenues are expected to increase 2.4 times from 2014 to $1.8 billion in 2018. Additionally, the Value-Add Company will be an unparalleled leader in aluminum commercial truck wheels and will hold the number one market position in North American architectural systems. Future profitable growth will be supported by a full pipeline of innovative products and solutions, and the pursuit of investment opportunities that provide a return above the cost of capital.
The Value-Add Company and Upstream Company will have distinct value profiles with the ability to effectively allocate resources and deploy capital in-line with individual growth priorities and cash-flow profiles. As independent entities, each company will be positioned to capture opportunities in increasingly competitive and rapidly evolving markets. The separation will enable both the Value-Add Company and Upstream Company to pursue their own independent strategies, pushing the performance envelope within distinct operating environments.
Conditions and Timing to Close
Alcoa is currently targeting to complete the separation in the second half of 2016. The transaction is subject to certain conditions, including, among others, obtaining final approval by Alcoa’s Board of Directors, receipt of a favorable opinion of legal counsel with respect to the tax-free nature of the transaction for U.S. federal income tax purposes, and effectiveness of a Form 10 registration statement to be filed with the U.S. Securities and Exchange Commission. Alcoa may, at any time and for any reason until the proposed transaction is complete, abandon the separation or modify or change its terms.
Alcoa will hold its third quarter conference call as scheduled on October 8, 2015 at 5:00 PM Eastern Daylight Time to present quarterly results.
About Alcoa
A global leader in lightweight metals technology, engineering and manufacturing, Alcoa innovates multi-material solutions that advance our world. Our technologies enhance transportation, from automotive and commercial transport to air and space travel, and improve industrial and consumer electronics products. We enable smart buildings, sustainable food and beverage packaging, high-performance defense vehicles across air, land and sea, deeper oil and gas drilling and more efficient power generation. We pioneered the aluminum industry over 125 years ago, and today, our approximately 60,000 people in 30 countries deliver value-add products made of titanium, nickel and aluminum, and produce best-in-class bauxite, alumina and primary aluminum products. For more information, visit www.alcoa.com, follow @Alcoa on Twitter at www.twitter.com/Alcoa and follow us on Facebook at www.facebook.com/Alcoa.
Johnson Controls Expands Global Production of Start-Stop Batteries to Meet Rising Automaker Demand
FRANKFURT, Germany, – By 2020, it will be difficult to buy a new vehicle that runs while idling. Start-Stop technology continues to gain in popularity as tightening government fuel economy and carbon emission reduction targets put additional challenges on car makers from around the world. In anticipation of increasing demand, Johnson Controls, the world’s largest automotive battery manufacturer, is adding Absorbent Glass Mat (AGM) battery production capacity. AGM is the technology at the heart of a Start-Stop system, which delivers consumers 5 percent fuel savings every time they fill up their gas tank.
With $555 million in investments between 2011 and 2020, the company is implementing plans to expand AGM production capacity in Germany, the United States and China. “Johnson Controls is currently the world’s leading provider of batteries for Start-Stop vehicles and we plan to stay that way,” says Lisa Bahash, group vice president and general manager Original Equipment, Johnson Controls Power Solutions. “To ensure we will continue to meet rising demand of car manufacturers and aftermarket retailers for this technology, we consider it a business priority to invest in increasing our production worldwide.”
The market for new vehicle and aftermarket Start-Stop batteries could rise to 56 million worldwide by 2020, compared to 22 million today. In this time frame, 85 percent of all new vehicles in Europe and 40 percent in the U.S. and China are expected to be powered with Start-Stop batteries. “We are expecting strong growth for Start-Stop technology, and with good reason. It requires minimal changes to the vehicle and costs significantly less than battery systems in hybrid or electric vehicles,” says Bahash. “Start-Stop is the best solution to help automakers meet upcoming environmental regulations.”
In Europe, Johnson Controls has invested more than $112 million in its facility in Hannover, Germany to increase production of fuel-efficient AGM batteries by 65 percent since 2011. Two years ago, the company also expanded its Zwickau plant with an investment of more than $112 million, making it the world’s largest production site for AGM batteries. In August, Johnson Controls announced additional capacity at its U.S. plant in Toledo, Ohio, bringing the overall investment to $130 million since the start of AGM production at this site in 2012. Johnson Controls is also planning to build a new automotive battery manufacturing facility in Shenyang, China. The $200 million state-of-the-art plant will have the capacity to produce 6 million automotive batteries a year, including both SLI and AGM. “Not only will we be making more Start-Stop batteries, this is also a signal to our customers that wherever they are in the world, they can expect the same high-quality, high-performing Johnson Controls products,” says Bahash.
Start-Stop technology automatically shuts off the engine when the car is idle and restarts it when the driver’s foot leaves the brake pedal. During this time, the vehicle’s electrical systems – from entertainment to lights – use energy from an advanced lead-acid battery (AGM) rather than the gas-powered engine, thus saving fuel.
The company will showcase its AGM batteries, along with its latest technological advancement, a 12V Lithium-ion battery for Advanced Start-Stop vehicles, at the International Motor Show (IAA) in Frankfurt, Germany. The show runs from September 17 to 27. With the addition of a 12V Lithium-ion battery, automakers can increase fuel economy efficiency by up to 8 percent.
About Johnson Controls
Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 170,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and seating components and systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2015, Corporate Responsibility Magazine recognized Johnson Controls as the #14 company in its annual “100 Best Corporate Citizens” list. For additional information, please visit http://www.johnsoncontrols.com or follow us @johnsoncontrols on Twitter.
About Johnson Controls Power Solutions
Johnson Controls Power Solutions is the world’s largest manufacturer of automotive batteries, supplying approximately 140 million every year to automakers and aftermarket retailers. The company’s full range of lead acid and Lithium-ion battery technology powers nearly every type of vehicle for our customers- including conventional, Start-Stop, Micro Hybrid, hybrid and electric. Johnson Controls’ recycling system has helped make automotive batteries the most recycled consumer product in the world. Globally, 15,000 employees develop, manufacture, distribute and recycle batteries at more than 50 locations. For more information, please visit http://www.JohnsonControls.com/PowerSolutions or follow @JCI_BatteryBeat on Twitter.
Manufacturing Day is a Nationwide Opportunity – Zana Brunner
As someone who works to support manufacturing in the United States, I’m constantly amazed by the remarkable number of opportunities manufacturing offers to job-seekers, communities and the nation. I also find it remarkable how manufacturing seems to be such a well-kept secret; the general public has some pretty big misconceptions about what it means to work in manufacturing.
This is where Manufacturing Day (MFG Day) comes in. For the past four years, a community of advocates including manufacturing executives, front-line workers, federal and state supporters and countless others, has been coordinating and promoting public events focused on manufacturing. Their goal: to make sure the secret gets out—that manufacturing offers many rewarding, middle class jobs in a diverse array of specialties.
Manufacturing jobs include research and development, engineering, management, front line production and more. These jobs are secure and pay higher than average salaries. And yet, many manufacturers are facing a shortage of employees to take over as older workers retire. What that means, according to a study by Deloitte and the Manufacturing Institute, is that by 2025 there will be 2 million unfilled jobs in the U.S.
If you’re a student, parent, educator or job-seeker, a MFG Day event can show you the many opportunities these openings represent.
Participate
Last year, MFG Day included more than 1,600 open houses, tours and other events in every state in the union. And we’re on track to surpass 2,000 this year.
As a parent, I often look for ways to spark interest in my children, inspire their future, and point them on a solid path for success. I’m looking forward to taking them to Camden Yards on MFG Day-eve to not only enjoy their favorite pastime (baseball), but also to see firsthand what gets made in their home state at a Made in Maryland expo during a Major League Baseball game.
The Maryland MEP center teamed with RMI (Regional Manufacturing Institute of Maryland) to host the event, which will include a pre-party for participating manufacturers, their employees and families. The national anthem will even be performed by a musician playing a Maryland-made guitar. And if you watch the game, you’ll see about 1,000 people seated in the Maryland Manufacturing Day section wearing MFG Day t-shirts.
Also in Baltimore, the Northrop Grumman Corporation will host an event that lets kids help kids, and get a chance to learn about advanced manufacturing. Students will assemble 3D-printed hands (created by the company’s engineers) that will be distributed to children who need them. This awesome activity is also occurring in Northrop’s Charlottesville, Va., location as a result of its partnership with Enabling the Future.
Across the country, events like this aim to help people understand modern manufacturing. Metropolitan Detroit will be the site of one of the largest celebrations. With the assistance of the Michigan Economic Development Corporation, more than 2,500 high school students will get a chance to see manufacturing in action and meet people who make things on October 2. Students will also learn more about the variety of educational pathways that lead to rewarding careers in the industry.
In one Michigan county alone, nearly 60 manufacturers of all sizes and representing many industry sectors will offer tours. To make the most of the events, earlier in the year manufacturers hosted high school principals to educate them on employment opportunities and the types of skills they’re looking for in the workforce. The county will offer a follow-up “Careers in MFG Expo” in December in collaboration with Macomb Community College. One of the companies involved decided to also form an academy to inspire students to consider careers in the industry.
MFG Day All Month Long
Like a few other states around the country, the manufacturing sector is celebrated with a full month of events and programs in Connecticut (as part of the state’s Connecticut. Dream It. Do It. program).
This is an exciting time for Connecticut, which just became one of only two dozen regions designated by the U.S. Department of Commerce as members of the Investing in Manufacturing Community Partnership (IMCP) initiative. The program will leverage economic development funding for workforce, supply chain and innovation, and will give Connecticut aerospace and shipbuilding companies a competitive advantage for federal funding.
Among the CONNSTEP (the MEP center in Connecticut) clients and manufacturing partners holding open house events on MFG Day are Associated Spring – Barnes Group, Bauer, Dymotek (at its Ellington location), Marion Manufacturing, Pegasus, Sikorsky and Birken. The month-long observation will also feature an array of events and discussions, including:
•Manufacturing Mania! for 200 middle school students in Bristol
•Making it Real: Girls & Manufacturing Summit in Groton, where female manufacturing leaders will hold roundtable sessions with more than 150 middle school and high school girls from Connecticut and Rhode Island
•Student Day at Pratt & Whitney in East Hartford, a division of United Technologies Corporation
Economic Benefits
With all of the benefits a career in manufacturing offers individuals, it’s not surprising that manufacturing also benefits our nation. For every $1 in goods produced, the manufacturing industry returns $1.37 to the economy. That adds up to $2.09 trillion dollars, which is large enough for U.S. manufacturing to be the 8th largest economy in the world! And behind all of this incredible output and production are 12 million American men and women who make the things that enable our everyday lives.
You can find an event near you on our MFG Day events page or follow #MFGDay15 on Twitter to see what’s happening in your area. Don’t miss this opportunity to learn about the exciting careers manufacturing has to offer.
Department of Commerce Blog Post by Zara Brunner, National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership
