ANNUAL REPORT 2012

2012ANNUAL REPORT 2012

2012

2

Mission Statement

“The Mission of the Aluminium Federation is to expand the market for aluminium products in the UK and to promote the interests of the Members of the Aluminium Federation.” Contents

Chief Executive’s Foreword 3

President’s Foreword 4

Direct Members / Member Associations/Associate Members 5

Members of ALFED Council 6

Communications and Government Affairs 7

Education of All Ages 9

50 years & 50 ways 11

Health and Safety 12

Energy and Climate Change 13

Annual Dinner 14

UK Statistics 15

Giant aluminium Olympic rings suspended from Tower Bridge, London, during the countdown to the games

2012

3

Chief Executive’s Foreword

Welcome to the Aluminium Federation 2012 Annual Report.

Uncertainty about the financial stability of some of the EU Nations and the future of the Euro remains a key factor influencing the UK economy. The financial constraints on public and private capital spending have made 2012 another difficult year for many of our member companies. ALFED have been working on a number of activities to support students and new employees, providing aluminium education from the classroom to the workplace.

Amongst our political parties there is much rhetoric about the value of manufacturing and in rebalancing the UK economy, but we have yet to see this rhetoric turned into real and tangible support for our country’s manufacturing base. This year the issue of skills shortages has prompted heated debate. There is a general recognition that many young people not progressing to University require vocational training to prepare them for the workplace. This will be a significant challenge for

the government and British industry as we move into 2013. We must be vigilant in defending our industry against further taxation and legislative burden.

I appeal to our parliamentarians to support businesses in their constituencies and recognise the need to reduce legislative burdens. The taxation of energy continues to constrict the competitiveness of UK manufacturing and as these policies continue to bite they will inevitably promote further carbon leakage as companies close with the loss of more manufacturing jobs in the UK.

ALFED has had another very active year particularly in our Political Lobbying and promotional activities, more about these later in this Annual Report. ALFED continues to support our Members in many ways to promote the use of Aluminium through our wide ranging education programmes and other events.

I thank those of our Members who serve on ALFED’s Council and our other Committees as well as the ALFED team and our advisors for the tremendous effort put in throughout the year to support our Members.

As the curtain falls on ALFED’s 50th year since its formation we look to the future with optimism for growth in the UK aluminium manufacturing sector and expansion of global trade for our member companies.

Will Savage Chief Executive – Aluminium Federation November 2012

2012

4

President’s Foreword

I took over this office from Colin Davies at the start of 2012 and have continued his good work to guide the ALFED team towards increased emphasis on the promotion of aluminium in all its forms, its application and its uses.

As well as promoting aluminium, political lobbying remains an important aspect of ALFED’s parliamentary activities. Through the support of our All Party Parliamentary Group we have held regular breakfast briefings throughout 2012 and an annual House of Lords lunch. These meetings provide opportunities to engage with our representatives and ensure that the interests of our industry are understood.

The renewed recognition that we need a balanced economy, where people and businesses that make things in our country are valued, is indeed refreshing.

In addition, the easing of the cumulative effect of the mountains of legislation imposed upon manufacturing industry is also welcome. We hope to see more evidence of this initiative in the coming year.

The Government remains intent on driving through an unachievable ‘ Green Agenda’, aiming for a national 80% energy saving by 2050. This will lead to further lack of investment, company closures and ‘carbon leakage’. We need energy reduction targets which are achievable, within a Climate Change Agreement which is structured to reward those who meet sensible and reasonable energy reduction targets. This remains the single most important factor restraining growth in the UK manufacturing sector as a whole.

ALFED has encouraged members to invite their local MPs to visit their plants and to discuss issues affecting their companies. This programme has been very successful during the year and has resulted in questions to the government on the subjects of energy tariffs and changes to Health & Safety regulation.

Continuing the ‘good news’ theme, we welcome the investment by Jaguar Land Rover to increase aluminium across their product range, this year launching the all-aluminium Range Rover.

We would like to extend our congratulations to ALFED and AAMRA members Avon Metals on securing their third Queens Award this year, a fantastic achievement. This follows the Queens award to ALTEK in 2011, we congratulate both companies.

Aluminium was well-represented at the London 2012 Olympic Games through its use in many of the new stadia, including the Velodrome and the Aquatics Centre, with their distinctive, curved, aluminium roofs. Aluminium was also chosen by the designers of the iconic 2012 Olympic Torch, 8000 having been produced to carry the Olympic flame around the UK.

I must sincerely thank the small but dedicated and hard-working ALFED team for their energy, ideas and enthusiasm, sustained during a particularly busy last twelve months, in promoting the interests of our members and the interests of the UK Aluminium Industry.

Carl Tomlinson President - Aluminium Federation November 2012

2012

5

Members

MEMBERS OF THE ALUMINIUM FEDERATION DIRECT MEMBERS

Alcoa Europe Flat Rolled Products

Aleris Recycling (Swansea) Ltd

Befesa Salt Slags Ltd

Bridgnorth Aluminium Ltd

Novelis Europe

Rio Tinto Alcan

ASSOCIATIONS ADMINISTERED BY THE ALUMINIUM FEDERATION

Aluminium Alloy Manufacturing & Recycling Association

Aluminium Extruders Association

Aluminium Finishing Association

Aluminium Powder and Paste Association

Aluminium Rolled Products Manufacturers Association

Aluminium Stockholders Association

Light Metals Association

NON-MEMBER ASSOCIATIONS ADMINISTERED BY THE ALUMINIUM FEDERATION

Non-Ferrous Alliance

Qualanod UK

Qualicoat (UK & Ireland)

The Diecasting Society

ASSOCIATIONS ADMINISTERED INDEPENDENTLY

Aluminium Packaging Recycling Organisation

ASSOCIATE MEMBERS

Arun Technology

Blythin & Brown Insurance Brokers Ltd

Commgate Ltd

Energy Management Ltd

Euramax Coated Products Ltd

Höganäs (Great Britain) Ltd

Hüttenes-Albertus (UK) Ltd

Jaguar Land Rover

Morgan Motor Company

Siemens plc

Superform Aluminium Ltd

The Brock Metal Company

W. Hallam Castings Ltd

An Aluminium Remelting Vortex

2012

6

MEMBERS OF THE ALUMINIUM FEDERATION COUNCIL Mr J Carl Tomlinson - President Tomburn Ltd / Aluminium Finishing Association

Mr A J (Ben) Arrowsmith Befesa Salt Slags Ltd / Aluminium Alloy Manufacturing and Recycling Association

Mr Mark Brookes Aleris Recycling (Swansea) Ltd / Direct Member

Mrs Joan C Chesney Novelis UK Ltd / Direct Member

Mr Colin S Davies Alcoa Global Rolled Products / Direct Member / Immediate Past President

Mr Bruce Gardiner CMK (Treatments) Ltd / Aluminium Finishing Association

Mr Richard (Rick) P Hindley Aluminium Packaging and Recycling Organisation

Mr David Humphies Sapa Profiles Ltd / Aluminium Extruders Association

Mr Brian J King Anglesey Aluminium Metal Ltd / Aluminium Primary Producers Association

Mr Simon D MacVicker Bridgnorth Aluminium Ltd / Aluminium Rolled Products Manufacturers Association / Direct Members

Mr Adrian Platt Befesa Salt Slags Ltd / Direct Member

Mr Terry Stocker All Metal Services / Aluminium Stockholders Association

ALUMINIUM FEDERATION COMMITTEE CHAIRMEN

Occupational Health and Safety Trevor Smith Alcoa Europe Mill Products

Communication and Rick Hindley Government Affairs Alupro

STAFF OF THE ALUMINIUM FEDERATION

Chief Executive Will Savage

Ann Gough Margaret Lane Tom Siddle Dr Alan Arthur

Accountant Karen Price

Consultants Dr Ken Campbell Oliver Carpenter Dr David Harris Richard Mahoney Brian Thorneycroft

World’s first SUV with a lightweight ‘all aluminium’ monocoque body structure

2012

7

Communications and Government Affairs

House of Lords LuncheonBaroness Gardner of Parkes hosted a very successful House of Lords Luncheon in May following the AGM of the All Party Parliamentary Group (APPG). ALFED President, Carl Tomlinson, gave an update on industry performance to the assembled parliamentarians and industry representatives, and spoke about the competitiveness of the UK aluminium industry and the challenges presented by legislation and taxation. Invited speakers were Dr Ken Campbell who focused on energy taxation and efficiency through the European Union’s Emissions Trading Scheme, and Professor Michael Stacey who discussed responsible sourcing of materials and components. He concluded that wise use of Aluminium in the built environment has the potential to make the Aluminium industry net carbon neutral.

New Communication & Government Affairs CommitteeALFED has launched a new ‘Communication & Government Affairs Committee’ which draws its membership from each of the associations. It will set the strategy for ALFED’s external representation going forward. At its first meeting in September the Committee set out Terms of reference. The format and focus of Parliamentary breakfast meetings for October and December were agreed. An education theme for the February 2013 breakfast meeting was proposed. Current ALFED promotional activities were reviewed and an update on the education initiatives was discussed. The Committee is to meet in advance of each Council meeting and a report will be made to Council.

October breakfast meeting

2012

8

Breakfast Meetings and Briefings

We have again held three breakfast briefings this year, chaired by Albert Owen MP. At the first meeting in February our guest speaker was Patrick de Schrynmakers, Secretary General to the European Aluminium Association. The assembled MPs and Lords were supportive of the points raised and have asked for further action to inform the All Party Group on metal theft and issues for discussion for the European Scrutiny Committee. The second meeting in October featured a presentation by Professor Garyl Rhys CBE, focusing on the economic climate for manufacturing in the automotive industry. The guest speaker at the December meeting was Mark White of Jaguar Land Rover, discussing the strategy of lightweighting vehicles and the global market.

2012

9

Education of All Ages

Alu D&T Challenge for Schools

A new Aluminium design competition has been launched to help students become more aware of the importance of sustainable design and the role aluminium can play in it. The Alu D&T Challenge is a free teaching resource for students aged 11-14 and a resource pack has been sent out to 6,000 schools across the UK.

As well as being linked to the curriculum and packed with inspirational ideas and practical examples, the resource, developed by the Aluminium Federation (ALFED) and the Aluminium Packaging Recycling Organisation (Alupro), challenges students to design an item using aluminium. The winners will be announced in February 2013.

The Challenge has been extended into delivering workshops in schools delivered by ALFED staff to help generate knowledge and enthusiasm both for the metal and the design competition.

University Lecture Programme

This year’s programme has involved 23 UK Universities with ALFED’s consultant Dr. David Harris delivering bespoke lectures on aluminium applications including automotive, the built environment and sustainability.

ALFED is keen to develop a training programme to support new entrants to the industry and also pre-employment training to build up a skills base for school leavers. The lack of industry-specific skills is a major concern to the UK Aluminium manufacturing supply chain, so it is critical that we develop a strategy to attract the brightest young people into our industry.

ALFED delivering the aluminium message to the classroom, year 7 students doing an aluminium

design workshop

2012

10

A-Z of Aluminium Courses

ALFED ran a second A-Z of Aluminium course in October 2012 following the sell out of the course in May. The A-Z course will be a regular feature of ALFED’s calendar in 2013.

Power of Aluminium

This year the ‘Power of Aluminium Extrusion in Design’ competition attracted a record number of entries from top UK Universities. This initiative, which aims to raise the awareness and understanding of using extruded aluminium sections, is sponsored by the Aluminium Extruders Association and managed by the Aluminium Federation. Through the offer of industrial visits, guest lectures, and a technical help-line, students develop a detailed understanding of aluminium and its properties.

This year 1st and 2nd place winners were both from Nottingham Trent University. Tom Brittain won the top prize for his Modular track shelving system. Second place went to Phillip Riley for his lightweight trailer concept. Both students were presented with their awards at the House of Lords lunch.

Tom Brittain, winner of the Power of Aluminium

competition 2012

2012

11

50 Years & 50 Ways

Celebrating our 50th year has been a key part of this year’s activity for ALFED, providing an opportunity to promote both the metal and the organisation. The celebrations culminated in a spectacular Gala Dinner in November with a capacity crowd.

The ALFED ‘50 Ways Aluminium Shapes our World’ series has attracted attention throughout the year. With a growing list of recipient’s right across the world the campaign celebrated the vast breadth of aluminium applications. It has also provided ALFED’s first move into social media with the use of ‘Facebook’ and ‘LinkedIn’ groups.

FIFT Y YEARS

2012

12

Health and Safety

Changes to the Health & Safety Fees regulations 2012 were implemented this year, targeting cost recovery through the ‘Fee for Intervention’ scheme.

The impact on businesses is not yet known. The UK aluminium sector has an excellent safety record, with companies providing detailed reporting of all incidents. There is concern that the proposed changes will have a significant and negative impact on this. In addition to the financial penalties, this policy is likely to damage the constructive relationship which has been built up between companies and the HSE. There are widespread concerns that the policy will generate a disincentive to the voluntary reporting of incidents, which has been very constructive in reducing hazards and risk in the workplace. ALFED have raised this matter with parliamentarians and tabled a question in parliament through Adrian Bailey MP.

If the Government really wants to support UK manufacturing, the competitiveness of the UK Aluminium Industry must be safeguarded.

2012

13

For the 45 ALFED members in the UK’s Aluminium Climate Change Agreement, the second half of 2012 has been a critical time. ALFED staff, and in particular Dr Ken Campbell, our energy and climate change advisor, are in the final negotiating stage with the Department for Energy and Climate Change (DECC), to agree the Aluminium industry’s energy reduction targets for the new Climate Change Agreement (CCA) which will run from 2013 to 2023. These discussions have been reported back to our members in a series of meetings.

During the previous 10-year CCA our industry consistently met the energy reduction targets imposed upon it by UK Government, in return for an 80% reduction in the climate change tax.

The UK’s Aluminium sector will continue to operate in an energy-efficient way contributing to the Government’s National Energy Reduction targets. However we send a clear warning to our legislators that over-zealous and unachievable energy reduction targets for industry will inevitably lead to more closures in our sector as the burden of energy taxation becomes too much for many companies to bear.

The UK’s legislative and taxation framework should be one that incentivises investment for existing UK manufacturing operations, and also by overseas companies seeking to invest in the UK.

Our Government and its legislators will do well to recognise the damaging effect of excessive legislative burden and draconian climate change taxation.

Energy and Climate Change

2012

14

Annual Dinner

On 14th November we staged a 50th Anniversary Gala Dinner at the Merchant Taylor’s Hall in central London. The 240 Members and their Guests were presented with a special anniversary souvenir programme. Throughout the evening speeches and presentations were made by Carl Tomlinson, ALFED President, and Will Savage, ALFED CEO, plus two Guest speakers Adam Hart-Davis and Martin Abbott, CEO of the London Metals Exchange.

Carl spoke of the potential growth for aluminium use in the UK and the need for cross-party support in Parliament to support our manufacturing industry. Martin Abbott addressed the audience echoing the call for government support for industry and reduction in regulatory burden. Adam Hart-Davis, writer and television presenter, provided some enlightenment and entertainment. He heralded this as the ‘Aluminium Age’, remarking that it may be as significant as the stone and iron ages to human socio-economic development.

A lifetime achievement award for services to the industry was awarded to Derek Webb of Metalweb.

Special features on display at the Dinner included aluminium Olympic torches from 1948 and 2012,

two stunning unique aluminium dresses designed and made by Faye Colette Bamber, the Diane

de Gabies casting of 1859 and murals from the 1945 London Exhibition ‘Aluminium from War to Peace’, all of which provided a beautiful historic backdrop to the evening.

Adam Hart-Davis arrives on an aluminium scooter

2012

15

INGOT PRODUCTION

2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 20112009

Primary Smelters

Secondary Production Predominantly from Old Scrap

Wrought Remelt Production Predominantly Using Recycled Scrap From Fabrication

100

200

300

400

500

600

WROUGHT & CAST DESPATCHES

2000 2001 2002 2003 2004 2005 2006 2007 2008 20102009 2011

Bar, section and tube (excl. forging bar)

Plate, sheet, strip & circles

Castings (estimated data, allowing for non-reporting companies)

100

200

300

400

500

600

UK Data on Wrought and Cast Aluminium Products x 1000 tonnes

2012

16

EXPORTS

2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 20112009

Primary Ingot Secondary Ingot

Extruded Products

100

200

300

400

500

600

Rolled Products

IMPORTS

2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 20112009

Primary Ingot Secondary Ingot

Extruded Products

100

200

300

400

500

600

Rolled Products

UK Data on Wrought and Cast Aluminium Products x 1000 tonnes

17

Aluminium Federation LtdNational Metalforming Centre47 Birmingham RoadWest BromwichWest Midlands B70 6PYUnited Kingdomt: +44(0)121 601 6363f: +44(0)870 138 9714e: alfed@alfed.org.ukwww.alfed.org.uk