Alcoa-Mt. Holly: A Strong Presence
January 31, 2012: Rotarian Jim Geffert introduced today’s speaker, Alcoa Plant Manager, Mike Rousseau, by holding up a dollar bill and explaining that the “topic for today is money” and the cost of doing business. And he couldn’t have been more right. In addition to plant production and industry statistics, Rousseau’s presentation provided a first-hand insight to the direct and indirect economic impact of Alcoa’s presence and potential absence.
Alcoa Inc. (NYSE: AA) (from Aluminum Company of America) is the world’s third largest producer of aluminum and is a world leader in the production and management of primary aluminum, fabricated aluminum, and alumina combined.
A primary aluminum smelter, Alcoa’s Mt. Holly site was constructed in 1979 on over 5000 acres of timberland near Goose Creek. The plant has become an industry leader in production efficiency, energy utilization, and environmental control, and proudly holds the title of the first primary aluminum plant in the world to be registered completely to the ISO 9001 Quality System Standard.
On both a global and local scale, Alcoa’s strong presence is unmistakable. In the Charleston region, Alcoa-Mt. Holly’s vast economic impact is outlined in the below Chamber of Commerce April 2011 study.
Alcoa-Mt. Holly’s Economic Impact At-A-Glance:
562 direct employees ($91,000 per job in annual wages & benefits)
2,815 total jobs created statewide due to Alcoa-Mt. Holly’s presence
$51 million annual payroll in the Charleston region
$184 million in local spending on goods and services at area businesses each year
$191 million spent statewide on goods and services annually
More than $3 million in property taxes paid to state and local governments annually
$2 million and 7,500 volunteer hours donated to community non-profits since 2006
$835 million pumped into South Carolina’s economy annually because of Alcoa
This “wonderful metal”, as Rousseau explains, is not only responsible for employing a “passionate” team of employees, but local residents who are committed to building a stronger community. A sentiment also shared on a corporate level with the generosity of the Alcoa Foundation. Some of the largest recent grants by the foundation to different Charleston area organizations include:
Trident Technical College – $400,000
Junior Achievement – $40,000
Earth Force – $43,000
SC Waterfowl Association – $45,000
The Nature Conservancy – $200,000
Trident Literacy Association – $35,000
So, how could the Lowcounty stand to lose this economic giant? Rousseau explained that the high electricity costs, representing 41% of their aluminum production costs, are far above the national average power rates.
Currently, Aloca-Mt. Holly pays their electric company, Santee Cooper, an annual cost to the tune of $180 million. Not surprisingly, Alcoa is Santee Cooper’s largest customer, consuming about 10% of the Moncks Corner-based utility’s power production.
As quoted in a recent Post and Courier article, Rousseau stated: “We are clearly focused and have a sense of urgency on the power situation and getting that fixed so we can be competitive on the world stage. We should be further along than we are now. We need to get this thing moving quickly.”
Although its current contract with Santee Cooper expires in 2015, a provision in the agreement states that Alcoa must notify the utility by June if it intends to terminate the deal. Rousseau explained that contrary to the reports, a solution must be met prior to the June deadline. This sense of urgency was evident and clearly stated in his last slide: “Now is the time for Santee Copper to provide a 20 year competitive rate structure, allowing Mt. Holly the opportunity to continue operation and investing in the Lowcountry.”
Submitted by Teal Van Saun, Keyway Committee