Printer Friendly

ORMET ASKS CLINTON ADMINISTRATION FOR FAIRNESS

 /EDITORS: Ormet Corporation, which is the fourth-largest producer of primary aluminum in the United States, operates a smelting plant employing 1,600 people in Hannibal, Ohio. For interviews on the following release or additional information, please call Debbie Boger at 304-234-3919. Thank you./
 BURNSIDE, La., March 18 /PRNewswire/ -- Ormet Corporation today called "unfair" a provision of the Clinton Administration's proposed Energy, or Btu, Tax, that it said would seriously damage the competitiveness of the U.S. aluminum industry. While not objecting to a tax on energy used to operate plants and equipment, the company voiced its objection to the taxing of electricity for non-fuel use, such as the electricity used as the primary ingredient or raw material in the production of aluminum.
 "Ormet is willing to pay its fair share of the proposed energy tax," said Emmett Boyle, chairman, president and CEO of Ormet Corporation, the nation's fourth-largest primary aluminum producer. "We just don't think the aluminum industry should have to bear a burden other businesses don't have to bear."
 Specifically, Boyle asked that the government grant an exemption for non-fuel use electricity, just as it has exempted the petroleum used in the production of plastics. He explained that it is as impossible to produce aluminum without electricity as it is to produce plastics without petroleum.
 "If this exemption is not granted, our company faces a $15 million energy tax bill, and that figure does not include the proposed increase in our corporate taxes or transportation costs," Boyle said. "That kind of tax liability can easily make us noncompetitive in the world aluminum market. And if we can't compete, we can't stay in business."
 -- A Primary Ingredient
 Boyle explained that aluminum can be commercially produced only one way, by subjecting alumina, the ore refined from bauxite, to an electrical charge. Therefore, he said, electricity is a raw material just as alumina is, and should be exempt from this tax.
 -- U.S. Competitive Disadvantage
 Domestic aluminum producers, especially independent producers, are already at a competitive disadvantage, Boyle noted. These producers pay, on average, 22 percent more for power than their foreign counterparts, yet the price of aluminum, a commodity, is set by the world market. Ormet's chairman observed that the price of aluminum, when adjusted for inflation, is at a 40-year low.
 This price appears unlikely to increase significantly during 1993, he said, citing worldwide overproduction and the "dumping" of aluminum by the Commonwealth of Independent States, particularly Russia.
 "Given these conditions, a 6 percent increase in costs -- which is what the current energy tax proposal totals -- will make it extremely difficult, if not impossible, to operate," Boyle concluded.
 The United States is now a net importer of aluminum, and the nation's capacity to produce this strategic metal is diminishing, Ormet's chairman said. In 1978, there were 32 smelters operating in this country; in 1993 that number is 22. In 15 years, a third of the U.S. smelters have ceased operating.
 "A tax on electricity used as a raw material may further reduce production capabilities and jobs in the aluminum industry," Boyle warned. "It is ironic that an economic package intended to create jobs could have the opposite effect."
 -- Jobs at Risk
 Ormet Corporation employs approximately 2,000 people and contributes $250 million annually to the economy in wages, benefits and material purchases. An additional 8,000 related jobs are generated through companies supplying goods and services to Ormet and its employees.
 The company's reduction plant, located in Hannibal, is an important contributor to the economy of the Ohio Valley. Ormet also has an alumina plant and bulk marine terminal in Burnside, La.
 Ormet Corporation asked those people who realize the unfairness of this proposed energy tax and its impact on their communities to contact the White House and their U.S. representatives and senators.
 Ormet Corporation, headquartered in Hannibal, is among the nation's top four producers of primary aluminum. In addition to the Hannibal smelting operation, Ormet owns and operates an alumina plant in Burnside, and operates the adjacent Ormet Burnside Bulk Marine Terminal. ORALCO Management Services, Inc., headquartered in Wheeling, W.Va., oversees top-level management functions of Ormet and its facilities.
 -0- 3/18/93
 /CONTACT: Debbie Boger of Ormet, 304-234-3919/


CO: Ormet Corporation; ORALCO Management Services, Inc. ST: Louisiana IN: MNG SU:

CD -- PG006 -- 7516 03/18/93 12:30 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Mar 18, 1993
Words:724
Previous Article:MARK TWAIN BANCSHARES ANNOUNCES CHANGE OF DATE OF ANNUAL MEETING OF SHAREHOLDERS
Next Article:AIR SEYCHELLES TAKES DELIVERY OF FIRST BOEING 757
Topics:


Related Articles
ORMET ASKS CLINTON ADMINISTRATION FOR FAIRNESS
ORMET ASKS CLINTON ADMINISTRATION FOR FAIRNESS
ALUMINUM PRODUCER ASKS IF TAX IS PICKING 'WINNERS AND LOSERS'
ORMET CORPORATION SAYS A LITTLE ISN'T ENOUGH
USWA ISSUES ANNOUNCEMENT
BRADLEY ASKS COURT FOR STANDSTILL ORDER ON ORALCO; 'BREACH OF FIDUCIARY RESPONSIBILITY' CITED
VICTORY FOR BRADLEY IN WEST VIRGINIA SUPREME COURT OF APPEALS; COURT TO HEAR ARGUMENTS ON JUNE 7
AEP and Ormet Reach Power Supply Agreement; Plan Filed for Reallocation of Service Territory
Bank of America Business Capital Provides $150 Million Exit Financing to Ormet Corporation.
Bank of America Business Capital Provides US$150 Million Exit Financing to Ormet Corporation.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters