Matalco raises Al billet output with OVACO buy

Canadian extrusion billet producer Matalco has purchased Kentucky-based competitor Ohio Valley Aluminum (OVACO) for an undisclosed sum.

The deal closed today and will take Matalco's output to 1.5bn lbs/yr counting the additional capacity from its planned plant in Franklin, Kentucky, set to open in mid-2022.

Matalco runs five billet plants in the US, excluding Franklin, and is owned by the Giampaolo Group, a Canadian conglomerate which also owns Triple M Metals, one of the largest private scrap dealers in North America.

The access to large volumes of aluminum scrap afforded by its association with Triple M Metals allows Matalco to vertically integrate much of its raw material supply, aside from primary aluminum.

OVACO opened its doors in 1955 and produces aluminum extrusion billet from recycled scrap, similarly to Matalco.

Over the past several years, Matalco has expanded its US footprint through greenfield investment and acquisitions, including the purchase of Indian-based billet maker Alexin in 2018. The increase in output comes as US primary aluminum billet production is mostly stagnating or declining, with the exception of some cast house investments planned by Century Aluminum.

Argus' weekly assessment of US spot billet upcharges posted record highs recently as global shortages of metal hardeners such as magnesium have increased the cost of billet production.

By John Betz