Aluminum maker Alcoa to split into two companies

NEW YORK, Sept. 28 (UPI) -- Aluminum maker Alcoa Inc. announced Monday it will split into two publicly traded companies to deal with Chinese competition.

The company, the United States' largest aluminum manufacturer and the world's third-largest, will keep its name attached to upstream operations which include bauxite mining, refining and smelting. This segment of its business has seen low prices and a decline in capacity since China increased production and flooded global markets with inexpensive aluminum.

The second company, still unnamed but being referred to as the "value-add" company, will concentrate on rolled aluminum value-added products for core clients, which include the automotive and aerospace industries.

Alcoa said it expects the second company to receive much of its revenue from aerospace, for which Alcoa manufactures gas turbine airfoils and fasteners. Auto manufacturers have also increased orders for lightweight aluminum to better comply with fuel-efficiency regulations.

The change is expected by the second half of 2016.

Klaus Kleinfield, Alcoa CEO, will be chairman and chief executive of the value-added company, and will remain chairman of the upstream company.