Boeing has signed 10-year agreements with five aluminium mills, worth a total of $4.3 billion, to guarantee stability of supply and prices. A similar "lean" raw materials procurement strategy has already been implemented with its titanium suppliers.
TMX, a US-based company owned by Thyssen of Germany, was recently selected as sole distributor to supply aluminium flat-rolled products and extrusions from the five mills to Boeing and its external suppliers.
The mills contracted include Aluminum Company of America of Pittsburgh, Pennsylvania, Century Aluminum of Monterey, California, Hoogovens Aluminium Walzprodukte of Koblenz, Germany (owned by Koninklijke Hoogovens of the Netherlands), Kaiser Aluminum of Houston, Texas, and Universal Alloys of Canton, Georgia (owned by Switzerland's ALU Menziken Industrie).
The deal, covering flat-rolled products and small and intermediate extrusions, replaces the existing system under which Boeing deals individually with seven flat-rolled product mills, 14 extrusion mills and more than 50 distributors.
Century Aluminum will supply heavy gauge, heat treated, aluminum plate. With estimated revenues of $400 million over 10 years, it is the largest single contract ever awarded to the Ravenswood, West Virginia operation.
A $28 million project at the plant is doubling heat-treated plate capacity to 22.7 million kilogrammes (50 million pounds) a year. Deliveries in 1999/2000 will roughly double Century's current level of shipments to Boeing.
Century will supply three types of plate to Boeing, including its 7050 Type-III product. The company claims that it is the only US producer able to manufacture Type III plate in gauges above 152.4mm.
Kaiser Aluminium's Trentwood, Washington, mill will supply heat-treated, flat-rolled, aluminum sheet and plate products. The mill has committed to a capital project to expand its production capacity and also plans to work with Boeing in its implementation of lean manufacturing.
Contracts under the new procurement strategy will be "-finalised shortly", says Boeing, with delivery of aluminium beginning in late 1998.
Source: Flight International
