Aughinish not affected by merger

The merger of three multinationals to form the world's largest aluminium company will not directly affect Aughinish Alumina, the managing director of the Co Limerick refinery has said.

Mr Michael Collins said the real determining factors for price levels and the health of the aluminium industry generally were end-user demand and the strength of the global economy.

Alcan of Canada, Pechiney of France and Algroup of Switzerland yesterday announced a merger deal to form the world's largest aluminium company.

The group expects the deal to lead to 4,500 job losses across the world and to save it $600 million (£441 million) a year. Most of the savings will be achieved within two years.

Alcan sold the Co Limerick refinery to Switzerland-based Glencore International in January of this year, for an undisclosed sum. However, Alcan took an after-tax loss of $120 million on the sale.

Mr Collins said the main effect of the merger would be to create value for the three parties taking part in the move, through cost reductions. "We will not be impacted on," he said.

He said the aluminium industry is a "very, very global industry", affected by developments in all of the world's economies. The Aughinish Alumina plant, based on the Shannon estuary, receives bauxite ore from West Africa, mainly Guinea, but also from Brazil. It extracts alumina from the ore and this is then shipped to the UK and continental Europe for smelting. The aluminium is then used in the manufacture of a variety of products, including aircraft, cars and beverage cans.

The Limerick refinery extracted 1.45 million tonnes of alumina this year. The plant employs 450 people full time and also a significant number of contractors. The full-time staff are all highly-skilled personnel, Mr Collins said.

Glencore, unlike the three companies taking part in the merger, is involved in a variety of commodities, in the agricultural, energy and metals sectors. While it is not a large player in the aluminium sector, it is a large player in the earlier alumina part of the aluminium process. The Co Limerick plant is an operating unit within Glencore.