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Novelis’ Chinese mill on target for 2014

Keywords: Tags  Novelis, Philip Martens, beverage cans, UBCs, aluminum, recycled content, Alcoa, Evermore Suzy Waite


NEW YORK — Novelis Inc. is still on track to complete construction of its 120,000-tonne-per-year aluminum automotive sheet manufacturing facility in China’s Jiangsu province by early 2014 after breaking ground on the facility in October, the company said.

The facility, which will operate an automotive heat-treatment finishing line and finish sheet produced at its South Korea rolling mill, might eventually enter the beverage can and consumer electronics markets, although Novelis hasn’t set a time frame for this, Philip Martens, president and chief executive officer, told AMM.

"We have no immediate plans to expand the China facility to serve the beverage can or other markets. However, the site is sized to allow us the potential to address future expansion opportunities and we will be looking at that going forward," he said.

Entering these markets would require separate rolling equipment, as the facility only has a heat-treatment line, Martens added.

The Atlanta-based producer, which already has a strong grasp of the beverage can markets in South America, said it stands to gain further share due to a rise in import duty tariffs to 20 percent from 12 percent this year, Martens said.

"We have 75 percent of the (UBC) market now (in Brazil). These taxes present an opportunity for us to strengthen our position in the can market (even more), including supply of can sheet and recovery/recycling of UBCs," he said.

Novelis will invest $32 million to expand its recycling capacity in Brazil, a Novelis spokeswoman said.

All of this falls in line with the company’s goal of achieving 80-percent recycled content by 2020. The company has hovered around 40 percent since August.

"We’re up on a year-over-year basis (and) a much larger percentage of our inventory is now scrap. But we’re also at the beginning of a big set of transitions," Martens said, adding that he expects this number to pick up in the next 12 to 18 months.

The company has said it is pleased with its UBC business since exiting its Evermore Recycling LLC joint venture (amm.com, Nov. 6) .

"(September) was certainly one of the strongest buying months for UBCs we’ve ever had," Martens said. "We were very successful in that transition, much more than we thought. On our own, we matured as a company. We know how to find scrap."

Although Novelis mulled entering the aerospace market at this time last year (amm.com, Nov. 10), the company has put these plans on hold for now.

"We decided not to pursue that for the moment. ... It’s on the backburner. In order to get access to (the aerospace markets), you have to do it through acquisition. It’s a big cost to bear, and (requires) a lot of time and effort," Martens said.

But "never say never. Never is a long time. But I think right now, we’re fully occupied with (our) large-scale capital investment and we’re very comfortable," he added.


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