Romanian aluminum producer Alro, owned by Vimetco, plans to add a new mill to increase capacity for aluminum wire production in response to higher demand on the US market. Even so, Alro expects a drop in the total aluminum production in 2012, due to a shortage in energy supply, and foresees lower operational revenues, down 11 percent, to some USD 639 million. Its profit expectations are also lower – down 5 percent on 2011, to some USD 71.4 million.

Alro's wire production should be up 17.8 percent, to some 87,000 tonnes this year.

“Estimations for 2012 are based on the entry into production of a Properzi mill to increase wire production, given the higher demand from Europe and the US, as the wire is the most profitable product made by the Primary Aluminum Division,” according to a statement from the company.

Overall, Alro expects its aluminum production to fall by 4.4 percent this year, to some 249,000 tonnes. This will be mainly triggered by the lack of energy, as its main supplier Hidroelectrica reduced energy deliveries in October last year due to the drought. To compensate for the lack of energy, Alro plans to introduce some 7,000 tonnes of aluminum waste into the production cycle this year, hoping to use some 60,000 tonnes of waste a year by 2016.

Alro's investment budget for this year is at USD 25 million, USD 15.4 million of which will be dedicated to the Division of Recast Aluminum.

Alro made a EUR 52.9 million profit in 2011, up from EUR 37.9 million the year before, due to favorable market conditions in the first nine months of the year, and despite a drop in revenues caused by lower aluminum prices and higher electricity costs in the last three months of the year. The producer added EUR 100 million to its turnover last year, reaching EUR 528 million.

“The structure of our costs, as well as significant investments allowed us to improve results when the international aluminum market went up, but also stay profitable when unpredictable external factors impacted our activity,” said Marian Nastase, vice-president of the board with Alro Slatina.

editor@romania-insider.com