Q&A with Sapa AS President Patrick Lawlor: Closing Aluminum Capacity?

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patrick lawlor president of sapa as headshotYesterday, MetalMiner ran the first part of our interview with Sapa Extrusions Americas President Patrick Lawlor, in which we covered Sapa’s aluminum customer base and how the merger between two of the world’s largest aluminum solutions providers, Orkla ASA and Norsk Hydro ASA, creating the new Sapa AS, will impact aluminum procurement/purchasing efficiencies.

Here’s Part Two.

MetalMiner: Now for the “elephant-in-the-room” question – it seems like the only play for a merged entity is to take aluminum capacity offline and permanently shut it down. Is that the near-term plan?

Patrick Lawlor: The situation is very different in North America than in Europe. The market has rebounded, growing since 2009, though it has been relatively flat this year. Regardless, capacity utilization for the old Sapa plants is strong and Hydro capacity utilization in both North America and South America has also improved over the past years. The merger in the Americas isn’t really a story of restructuring and reorganizing – it’s much more a story of an enhanced offering to our customers by bringing in a wider range of capabilities to increase market share over the coming years.

FREE Download: The Monthly MMI® Report – covering the Aluminum market.

MM: Do you see anything specific on the horizon indicating strong growth?

PL: The official data from the Aluminum Association shows 2013 down by 1% in terms of market demand from 2012. We still see continued recovery in the housing market, and that is good for extrusions. Housing starts are up as well. The light-weighting trend in the automotive industry has provided a pretty buoyant market for aluminum extrusion demand. New platforms through 2017 have greater aluminum content.

MM: Any other growth areas?

PL: Trailer market build rates are much higher as well, though they are now flattening out albeit remaining at high levels.

MM: How do you at Sapa AS position yourselves to take advantage of the growth trend of aluminum in the automotive sector?

PL: In terms of positioning ourselves, automotive is a very exciting area for us. We have also organized many Sapa Profile Academies over the past years  where we invite existing customers and prospects to a two-day education session to walk them through why and where extrusions are used and their design capabilities; and share with them what our Sapa North American Tech Center in Portland, Ore., is doing regarding looking at alternative materials and identifying how extrusions can be used in product and application design. At the end of the day, extrusion usage is still much lower here than in Europe – education around new applications and uses will help increase the size of the market.

FREE Download: The Monthly MMI® Report – covering the Aluminum market.

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