Alcoa Seeks Buyer for San Cibrao Industrial Complex Amid Financial Challenges
Alcoa has announced that the bidding process for the sale of its San Cibrao industrial complex, including both the primary aluminum plant and the alumina plant, will conclude in the second quarter of 2024. Despite improved energy and aluminum prices, Alcoa's president, Bill Oplinger, has emphasized the ongoing challenges in making the complex viable under current conditions.
During a presentation to investors promoted by Bank of America, Oplinger reiterated the difficulty of the transfer and highlighted the company's stance that it will not continue to finance its Spanish operations once cash reserves are depleted. This has raised concerns in the A Mariña lucense region. The central government of Spain is participating in the discreet search for potential buyers.
Oplinger mentioned that while energy and aluminum prices have improved, the San Cibrao complex remains unviable without government support and union flexibility. He stressed that the success of the sale process depends heavily on these factors.
Alcoa has completed an optimization study and identified a set of potential short- and medium-term improvements to make the business viable. However, the company aims to complete the bidding process for the sale by the end of June 2024, as outlined in its roadmap presented to the unions. The company expects to have binding offers for the complex by this time.
Oplinger hinted at the possibility of closure if a buyer is not found, stating that cash reserves are expected to be exhausted in the second half of 2024. At that point, Alcoa will cease further funding and may need to make difficult decisions regarding the future of the complex.
The sale of San Cibrao is complicated by the business's accumulated losses and unresolved issues, such as the expansion of the alumina sludge pond and the construction of the anode baking furnace, which is crucial for the aluminum plant's future competitiveness. The president of the works council, José Antonio Zan, has emphasized the urgency of resolving these issues to attract potential buyers and ensure long-term viability.
