NEW YORK Novelis Inc. is
still on track to complete construction of its
120,000-tonne-per-year aluminum automotive sheet manufacturing
facility in Chinas Jiangsu province by early 2014 after
breaking ground on the facility in October, the company
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 hasnt set a time frame for this,
Philip Martens, president and chief executive officer, told
"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,"
Novelis will invest $32 million
to expand its recycling capacity in Brazil, a Novelis
All of this falls in line with
the companys goal of achieving 80-percent recycled
content by 2020. The company has hovered around 40 percent
"Were up on a
year-over-year basis (and) a much larger percentage of our
inventory is now scrap. But were 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 weve 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. ... Its on the backburner. In order to
get access to (the aerospace markets), you have to do it
through acquisition. Its 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, were fully occupied
with (our) large-scale capital investment and were very
comfortable," he added.