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Allegheny Raises Titanium Investment Plans

Specialty metal producer is budgeting up to $500 million in 2007

February 25, 2007 — Allegheny Technologies continues to bet big in the aerospace market. The Pittsburgh-based specialty metals group now says it will invest another $38 million to add a further 4 million lb/year of titanium-sponge capacity, in this case at Albany, OR.

Titanium sponge is the primary product of titanium ore, and is essential to producing titanium alloys for processing into mill products, castings, or forgings. ATI last year reactivated a titanium-sponge plant at Albany, and is building a new plant for the product at Rowley, UT. It expects the Albany plant to have a titanium-sponge capacity of 20 million lb/year by 2008, and to have a company-wide capacity for titanium sponge of at least 44 million lb/year by 2009.

The new effort at Albany calls for four new reduction and distillation furnaces, plus auxiliary equipment. The first of these furnaces is planned to start early in 2008. The next two furnaces will begin production in subsequent months, and the fourth is scheduled to start in the later part of the second quarter 2008.

New vacuum-arc reduction furnaces, which convert the sponge into titanium alloys, were announced for the same site last June.

These efforts are part of a larger capital-investment program by ATI — involving titanium and specialty metals — to serve expanding demand from aerospace manufacturers, and will total $450 million to $500 million during 2007 alone. The group recently inked long-term supply agreements for titanium products (as well as nickel-based superalloys and vacuum-arc melted specialty alloys) with GE Aircraft and Boeing. Other applications for titanium mill products lie in chemical processing and oil-and-gas markets.

According to ATI chairman Patrick Hassey, "The opportunities to grow our titanium mill-product shipments are significant, and continue to increase. As a result, we decided to move forward with the further expansion of our Albany, OR titanium sponge facility and position the Rowley, UT, facility for future expansion."

Hassey, who is also president and CEO, continued: "ATI's planned titanium sponge capacity provides a stable low-cost supply of this vital raw material that is strategic to achieving our growth potential. The projected return on these investments is very attractive.

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