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Novelis enters China with auto sheet plant

Keywords: Tags  Novelis, aluminum, automotive, heat treatment, China, Jiangsu province, greenfield, Steve Fisher rolling mill

NEW YORK — Novelis Inc. plans to break ground on a 120,000-tonne-per-year aluminum automotive sheet manufacturing facility in Jiangsu province later this year, the first China-based facility in the company’s history.

The Atlanta-based company will start building the plant in the third or fourth quarter, with the aim of beginning production by the end of 2014, Steve Fisher, Novelis’ chief financial officer, told AMM.

The new facility will operate an automotive heat-treatment finishing line, and finish sheet produced at Novelis’ South Korea rolling mill.

Initially, it will solely finish sheet for the automotive industry, although Novelis might consider entering other end markets a few years down the road, which could include beverage cans or consumer electronics, Fisher said.

"We have procured enough land at this greenfield site in China to expand in the future, but right now we’re just focused on auto," Fisher said. "As we bring the facility up, we will continue to evaluate opportunities inside China to expand it into a more integrated facility. (But) this finishing equipment we’re starting is very much geared at automotive heat treatment."

Novelis has forecast annual global automotive growth of 25 percent over the next five years as auto manufacturers continue to push toward the lightweight metal.

"This sets us up to really distinguish ourselves as the true leader in automotive with auto paneling and heat treatment," Fisher said.

Novelis’ long-term goal is to sell all of its products made at the new Chinese facility to local auto manufacturers, although it will serve some export customers in the near term, he added.

"There is very much a customer pull (in China)," Fisher said, pointing to announcements by Jaguar Cars Ltd. and Ford Motor Co. about expanding manufacturing bases in the country. "Our long-term goal is to sell virtually 100 percent within China."

The site, which sits on more than 160 acres, is located in the Changzhou National Hi-Tech District, and is close to railroads and the Changzhou port on the Yangtze River.

Novelis has been considering various ways of entering Chinese markets since late last year (AMM, Nov. 11).

The company is on target with its previously announced $400-million expansion of its South Korean rolling mill (AMM, May 6), Fisher said.

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