Alumax Performance Plan Targets $100 Million Increase In Annual Pretax Operating Earnings.

ATLANTA--(BUSINESS WIRE)--Nov. 4, 1997--

Company to Adopt a New Value Measurement System

Alumax Inc. (NYSE: AMX; Toronto: AXI), today announced that it has initiated a performance improvement plan intended to increase the company's annual pretax operating earnings by about $100 million as compared with 1997 results -- or about $1.05 per share after taxes, without regard to any changes in aluminum pricing or any increases in shipment volumes.

Approximately $69 million of the targeted performance improvement is expected to come from operating cost efficiencies and from actions to bring all of Alumax's operations up to a level of the company's best practices. About $18 million is expected to come from gains in productivity and workforce attrition.

Also included in the $100 million performance improvement plan is about $13 million in nonrecurring charges and write-offs associated with the previously announced consolidation and action plan at the company's semi-solid forging operations.

Thomas G. Johnston, executive vice president responsible for operations, said:

"Over the past several months, we have engaged in a broad review of prospective cost savings and productivity improvements at Alumax. In addition to the nonrecurring charges associated with our semi-solid forging operations, we have identified potential performance improvement benefits of approximately $6 million that should be achievable in the fourth quarter of 1997, an additional $65 million to be obtained in 1998, and a further $16 million to be realized in 1999.

"These additional improvements will come from across our businesses. We expect to see about $20 million of that in our primary aluminum operations, about $15 million in our semi-fabricated businesses, and about $52 million in our fabricated operations."

Mr. Johnston continued:

"This is the most significant performance improvement initiative undertaken by Alumax, but not the last. We intend to continue this initiative on an ongoing basis and expect that further improvements will be identified and obtained."

Allen Born, Alumax chairman and chief executive officer, said:

"Adding economic value and earning the cost of capital have become major measuring sticks of corporate performance in today's world.

"In addition to the performance improvement plan that Tom Johnston described, we will also be implementing a new value measurement system with assistance from the Boston Consulting Group.

Mr. Born noted:

"The new value measurement system will be put in place in 1998. Its purpose will be to maximize the company's total shareholder return.

"The new system will be designed to reward our businesses that improve their financial returns compared with their cost of capital. It will put renewed focus on the effective management of our assets and on improved profitability in order to improve our cash flow."

Mr. Born also noted: "Our performance improvement plan and our decision to adopt a new value measurement system are two examples of powerful business initiatives taking place within Alumax. These, together with major underlying trends in the aluminum market, should have a positive impact on our business performance and on the value of Alumax."

Alumax is a world leader in aluminum with assets of $3.4 billion and 1996 revenues of more than $3.1 billion.

The company produces and markets primary aluminum ingot, billet and slab and is a major fabricator of value-added aluminum products for the transportation, distributor, building and construction, packaging and consumer durables markets.

CONTACT: Alumax

Thomas R. Hagley (Media)

404/846-4642 Fax: [phone]

or

R. Daniel Loh (Investors)

404/846-4752 Fax: [phone]