Alcoa Completes Acquisition of Russian Fabricating Facilities in Samara and Belaya Kalitva from RUSAL

02-01-2005: Alcoa announced it has completed the acquisition from RUSAL of two fabricating facilities in Samara and Belaya Kalitva in the Russian Federation for $257 million in cash.

"These plants have unique capabilities, a wide product breadth and a very capable workforce," said Alain Belda, Alcoa Chairman and CEO. "Acquiring these assets supports our growth plans in the commercial transportation, aerospace, automotive and packaging markets.

In 2005 Alcoa plans to invest more than $80 million in capital and technology in the two facilities as well as investing in environmental, health, safety and Alcoa Business System (ABS) training to build consistency across these plants and others within the Alcoa system. The investments also will strengthen the ability of the plants to compete in the world market. These capital spending figures are included in Alcoa's previously announced 2005 capital spending plan of approximately $2.5 billion, of which $1.6 billion is dedicated to growth projects.

As a result of the acquisition and integration, Alcoa expects 2005 earnings from these assets to be an after-tax loss of approximately $40 million as they are put in a position to compete globally.