Alcoa to Commercialize MicromillTM Technology in Worldwide Licensing Deal

September 14, 2015 | By Business Wire News

NEW YORK

Lightweight metals leader Alcoa (NYSE: AA) today announced it will commercialize its breakthrough Micromill^TM technology, working with the Danieli Group, a global supplier of plants and equipment to the metals industry. Danieli will license Alcoa’s intellectual property associated with manufacturing advanced Micromill^® products. In a separate announcement made earlier today, Alcoa and Ford Motor Company said that the automaker has selected Micromill material to be used on its 2016 Ford F-150 truck.

Under the letter of intent, Alcoa and Danieli will work toward an agreement to sell Micromill equipment and license the patented Micromill technology. As part of the collaboration, Alcoa will grant Danieli exclusive rights to sell Micromill equipment for a limited period of time. In addition, the companies will work together to license the Micromill alloys and process technology to potential customers around the world, initially targeting Europe, South America, and Southeast Asia.

“This agreement puts our disruptive Micromill technology on the fast-track to commercialization,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “Micromill technology has the potential to change the face of the aluminum rolling industry – producing material with unrivalled characteristics, through a revolutionary manufacturing process. Our partnership with Danieli will move this proprietary technology from pilot plant to full-scale production, unlocking value for our shareholders and bringing high-tech metal to customers around the world.”

To date, the Company has Micromill qualification agreements in place with nine major automotive customers on three continents, including Ford.

In addition to Ford’s use of Micromill material on the F-150, Alcoa further announced today it has entered into a Joint Development Agreement to collaborate with the automaker on next-generation aluminum alloys for automotive parts using Micromill technology. The projected use of Micromill material on Ford vehicles is expected to more than double from 2016 to 2017.

Micromill technology produces an aluminum alloy that is 40 percent more formable and 30 percent stronger than today’s automotive aluminum, while meeting stringent automotive surface quality requirements. Compared with parts made from high strength steel, automotive parts made with Micromill material are twice as formable and at least 30 percent lighter.

In addition to the enhanced material properties that the Micromill delivers, it also significantly reduces production time. It is the fastest, most productive aluminum casting and rolling system in the world. A traditional rolling mill takes around 20 days to turn molten metal into a coil; Micromill does it in just 20 minutes.

Specific terms of the letter of intent with Danieli were not disclosed.

About the Alcoa Micromill

The Micromill is Alcoa’s proprietary technology that manufactures the most advanced aluminum sheet on the market. The Micromill process dramatically changes the microstructure of the metal, producing an aluminum alloy that has 40 percent greater formability and 30 percent greater strength than the incumbent automotive aluminum used today while meeting stringent automotive surface quality requirements. Additionally, automotive parts made with Micromill material will be twice as formable and at least 30 percent lighter than parts made from high strength steel. The Micromill alloy has formability characteristics comparable to mild steels.

The increased formability of Micromill aluminum makes it easier to shape into intricate forms, such as the inside panels of automobile doors and external fenders, which today are generally made of steel. The increased material strength improves dent resistance, enabling the production of automotive sheet that is thinner and even lighter than previous generations.

It is also the fastest, most productive aluminum casting and rolling system in the world. A traditional rolling mill takes around 20 days to turn molten metal into coil; Micromill does it in just 20 minutes.

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 more than 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.

About Danieli Group

Danieli Group is a leading global supplier of plant equipment to the metals industry, from turnkey rolling mill equipment to integrated plants. The Danieli Team is a multinational collection of companies that have helped shape the history – not to mention the progress – of metals production from ferrous to non-ferrous materials. The Danieli Group’s know-how covers essentially all the production steps for high-quality metal products with strengths developed especially for continuous processes in the metallurgical industry.

Danieli’s mission is to be a step ahead to support customers’ competitiveness (CAPEX + OPEX), developing technological packages to improve existing plants, to let them become as competitive as the new ones.

Danieli is present worldwide with 11,000 employees and 8 directly managed engineering and production centers in Italy, Germany, Thailand, China, Austria, India and Russia. For more information, visit http://www.danieli.com/en/

Forward-Looking Statements

This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “may,” “outlook,” “plans,” “projects,” “should,” “targets,” “will,” or other words of similar meaning. All statements that reflect Alcoa’s expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements, including, without limitation, statements regarding growth opportunities for aluminum in automotive, commercial transportation, and other applications; forecasts regarding the potential for new manufacturing technologies, equipment, or processes, including the Alcoa Micromill^TM; projections regarding the volume of Micromill material to be used on Ford vehicles; and statements about Alcoa’s strategies, outlook, and business and financial prospects. Forward-looking statements are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict and are not guarantees of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in aluminum industry conditions; (b) unfavorable changes in the markets served by Alcoa, including automotive, commercial transportation, and other markets; (c) failure to successfully commercialize, or to realize expected benefits from, new or innovative technologies, equipment, processes, or products, including, without limitation, the Alcoa Micromill^TM, at the levels or by the dates anticipated, whether due to changes in the regulatory environment, competitive developments, unexpected events, such as failure of equipment or processes to meet specifications or customer performance expectations, disagreements with partners, or other factors; (d) the risk that Alcoa is unable to supply the volume of Micromill^® material to Ford in the quantities or by the dates required, or that such material is not used by Ford in the volumes projected; (e) the risk that the technology licensing agreement for the Micromill process is not completed, or does not result in the revenues anticipated, whether due to the failure to document the confidential information necessary for the successful implementation of the Micromill licensing program, failure of the commercial strategy, or other reasons; (f) risks relating to the business or financial condition of key customers, suppliers, and business partners of Alcoa; and (g) the other risk factors discussed in Alcoa’s Form 10-K for the year ended December 31, 2014 and other reports filed with the Securities and Exchange Commission. Alcoa disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events or otherwise, except as required by applicable law.