Reuters Summit-UPDATE 2-Argentina's Aluar plans Brazil investment

* For other news from the Reuters Latin American Investment Summit, click on http:/www.reuters.com/summit/LatinAmericanInvestment11?pid=500

* Output seen at 475,000T in 2011 vs 425,000T last year

* Prices in recovery; global 2011 average seen at $2,750/T

* Q3 earnings "in line" with Q2

By Luis Andres Henao and Jorge Otaola

(Adds byline, details, background)

BUENOS AIRES, April 4 (Reuters) - Argentina's biggest aluminum producer, Aluar , is planning to invest soon in Brazil and expects output to reach 475,000 tonnes this year, the company's chief executive said on Monday.

Aluar will not meet its goal to increase output to 515,000 tonnes a year in 2011 as it shifts to focus on margins, Chief Executive Javier Madanes told the Reuters Latin America Investment Summit in Buenos Aires.

"We've prioritized the investment to add value to products...it delays the expansion plan to boost output, but production will still rise this year" from 425,000 tonnes last year, Madanes said.

He sees restrictions in Brazil's aluminum market as an opportunity to invest in the regional powerhouse.

"Brazil has restrictions that are blocking supply while demand is rising. We're looking into investing there," Madanes said. Asked when the investment could take place, he said: "very soon."

The company's third-quarter earnings "will be in line" with the $40 million net profit in the second quarter, Madanes said.

The global price for aluminum , trading at around $2,630 on Monday, should average around $2,750 per tonne this year, Madanes said.

"If the world economy doesn't see any upturns, if the world economy grows at 3 or 4 percent this year, we see a positive outlook for aluminum, perhaps with a slight hike in prices," Madanes said.

But he predicted it would take years before commodities demand and prices return to 2008 peak levels when aluminum prices reached $3,300 per tonne.

Madanes said in recent years China had made an enormous strides to become a major supplier in the global aluminum market.

"China currently supplies 22 to 24 percent of the world's aluminum...it went from having a large demand for the product to become a supplier," Madanes said.

Aluar regularly receives acquisition offers from companies at home and abroad, but is not currently considering any of them, he said.

The company, which exports about 75 percent of its total output, recently hired 300 employees to increase its workforce to just under 4,000. Most work at Aluar's primary aluminum production plant in the southern city of Puerto Madryn.

Aluar, which is 77 percent controlled by the Madanes family, is one of several firms in which the state pension administrator, Anses, has a stake after the government took over the private pension system in 2008.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

The government holds a 10 percent stake in the company.

(For top stories from the Reuters Latin American Investment Summit, see [ID:nN27135818])

(Additional reporting by Juliana Castilla in Buenos Aires and Karen Norton in London; Editing by Matt Driskill)