Constellium’s major operations
Constellium N.V. (CSTM) was formed in 2011, when Rio Tinto (RIO) divested its stake in Alcan’s engineered products business. Constellium is engaged in the aluminum fabrication business. Kaiser Aluminum (KALU) and Precision Castparts (PCP) are the other major fabricators.
Constellium produces aluminum sheets and other value-added products. It isn’t a primary aluminum producer like Vale S.A. (VALE) and Alcoa (AA). Currently, Alcoa forms 2.65% of the Materials Select Sector SPDR ETF (XLB).
Constellium has three business segments. This can be seen in the above chart. In this part of the series, we’ll learn more about Constellium’s major operations.
Constellium’s business segments include:
- Aerospace and Transportation – This business unit provides advanced solutions to aerospace, defense, transportation, and general engineering customers. It has dedicated plants in the US and Europe to cater to these customers. The products include plates, sheets, coils, and extruded products. It operates eight dedicated plants that manufacture products for the aerospace and transportation sectors.
- Packaging and Automotive Rolled Products – Constellium is a market leader in aluminum packaging, automotive, and customized industrial coils and sheets. The packaging industry is one of the biggest aluminum consumers globally.
- Automotive Structures and Industry – Constellium provides sheet and extruded products to automotive companies. The products include crash management systems, cockpit carriers, and other safety components. Constellium has production facilities in the US, Europe, and China to cater to these customers. Aluminum use in vehicles has been rising. Increasing the aluminum content in vehicles will help automakers reduce the total vehicle weight. This helps them increase the vehicle’s fuel economy.
Constellium’s fourth quarter earnings were a positive surprise for the markets. In the next part of this series, we’ll discuss the key highlights of Constellium’s 4Q14 earnings.