Splitting its bauxite, aluminum and casting operations from its engineering, transportation and global rolled products, Alcoa is dividing its metals efforts into two independent companies.

Reuters has reported that the company acknowledges that its legacy aluminum operations and higher-value and automotive businesses were diverging and no longer compatible. Alcoa's traditional smelting business has been hurt by a ballooning surplus of aluminum, the news agency says. This has caused prices to sink and deepened the industry's worst crisis in years.

(Read “Automotive Market a Target for Aluminum Process Innovation.”)

At the same time, the company has bet on growth from higher-margin titanium and high-strength aluminum sales to the aerospace industry. Reuters says that airplane manufacturers have turned to lightweight titanium from aluminum and automakers to new, strong aluminum alloys instead of high-strength steel to improve performance and fuel efficiency.

One of the two divisions will concentrate on upstream products such as aluminum, and will retain the name of Alcoa. The other will focus on engineered products, including automotive and aerospace segments, which also involve titanium. The name of the second company has not yet been established. The change is expected to take place mid-2016.

Recently, Alcoa announced an expansion of a partnership with Ford Motor to develop stronger aluminum for auto body parts. It also invested approximately $60 million in the expansion of manufacturing capabilities in a Pittsburgh-area technical center.

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