AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


Timing crucial as Novelis targets recycling goals

Keywords: Tags  Novelis, aluminum, Derek Prichett, recycling, aluminum scrap, Jethro Wookey


LONDON — Derek Prichett, vice president of global recycling at Novelis Inc., is confident that the company can source enough scrap metal to hit its interim goal of 50-percent recycled content in its products by 2015, but acknowledges that things will get harder beyond that as it targets 80-percent recycled material by 2020.

When entering new markets with recycling capacity, timing is crucial, he told AMM sister publication Metal Bulletin.

“Timing is everything—too early, and the financial returns are unacceptable. Too late, and you miss the opportunity,” Prichett said.
Atlanta-based Novelis’ last public announcement on the progress toward its target was at Metal Bulletin’s 27th International Aluminium Conference in Moscow, where the company said it had reached a recycled content of 42 percent.

“We’re very comfortable we have a firm plan and projects approved to get to 50 percent by 2015,” Prichett said.

In November, Novelis broke ground on what it is predicting will be the world’s largest aluminum recycling center, in Nachterstedt, Germany (amm.com, Nov. 27).

Constructed next to the company’s existing aluminum rolling mill, the new facility will produce 400,000 tonnes per year of aluminum sheet from recycled material.

This project follows the company’s opening of Asia’s largest aluminum beverage can recycling facility in Yeongju, South Korea, in October, (amm.com, Oct. 24) and the January announcement that Novelis’ Brazilian subsidiary is investing $35 million to double its recycling capacity to 400,000 tonnes per year.

All told, by 2015 Novelis will have invested $500 million in doubling its asset base since announcing its 80-percent recycled content target in mid-2011, and there is much more to come.

“We have a number of other projects under consideration,” Prichett said. “At least one more in each of North America, South America, Europe and Asia sometime in the next five years.”

But Novelis will need to redouble its efforts to reach its long-term target. It is aiming for 2 million tonnes per year of recycled metal by 2015 from 1 million tonnes per year in 2011 and will need to reach 4 million tonnes per year by 2020 to hit the 80-percent target.

To do that, Novelis will need to combat a growing shortage of aluminum scrap. Secondary aluminum prices in the United Kingdom and European markets have been rising steadily since November, due not to better demand but to higher input costs from a tight scrap market.

U.K.-based producers have told Metal Bulletin that the current scrap shortage is the most severe they have seen in more than 20 years.

Even if the scrap market improves—shortages are often short-lived due to shifts in manufacturing activity—Novelis will need to find new sources and new technologies to optimize its scrap collection efforts to meet its sourcing goals, and will need to move into new markets in which the use of aluminum cans and the recycling of aluminum metal is at a far less advanced stage than in its traditional markets.

“We’re very happy with the market response and we see no significant issues sourcing material to feed the (announced) expansions,” Prichett said. “But we acknowledge that it will get harder as we go forward.”

Not all regions are as effective at collecting used beverage cans as Brazil, where more than 98 percent of all consumed cans are reused and where Novelis operates five can-collecting centers. In Asian markets especially, more needs to be done to encourage recycling of all types at the consumer level.

“We participate in manufacturing and aluminum associations in each region and financially support the promotion of recycling through those organizations,” Prichett said.

“Recycling strategies differ—in some developing markets, we’re getting much closer to ground-level collection,” he added, noting that the company has recently opened a recycling center in Vietnam as it looks to tap that market.

China is clearly a massive potential market, and though it has lagged the western world in terms of environmental policies that encourage recycling, Prichett does not see this situation lasting into the long term.

“China is quite aggressive compared to global standards,” he said. “It’s not true that (environmental) standards will be more lax there.”
But new Asian markets will only yield adequate returns if the timing is right. That means before other companies can grab market share, but not until there are also essential downstream producers entering the same space, allowing for the establishment of closed-loop supply contracts.

Novelis’ latest expansion in Brazil comes as London-based can maker Rexam Plc’s new Brazilian plant comes on stream, for example, and Novelis will hope for similar industry support in new markets.

“To develop a market for aluminum cans, you need both a source for aluminum sheet and a can maker,” Prichett said. “Customers need to make investments in new can-making capacity. Unless you have that, it’s hard to develop a market.”

Timing also needs to be matched with technology, and Novelis is adapting sorting technology from the food and waste industries as well as shredding technology from the steel industry to its aluminum facilities, allowing it to take more contaminated scrap and, crucially, more types of scrap as well.

“We have a lot of new, high-speed sorting technology, using faster equipment,” Prichett said. “It’s equipment commonly used in the food and municipal waste industries, and means we can remove impurities from more contaminated scrap. This allows us to use more than in the past.”

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends