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
Timing is everythingtoo 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 Bulletins 27th
International Aluminium Conference in Moscow, where the company
said it had reached a recycled content of 42 percent.
Were very comfortable we have a firm plan and
projects approved to get to 50 percent by 2015, Prichett
In November, Novelis broke ground on what it is predicting will
be the worlds largest aluminum recycling center, in
Nachterstedt, Germany (amm.com, Nov. 27).
Constructed next to the companys existing aluminum
rolling mill, the new facility will produce 400,000 tonnes per
year of aluminum sheet from recycled material.
This project follows the companys opening of Asias
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
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
U.K.-based producers have told Metal Bulletin that the current
scrap shortage is the most severe they have seen in more than
Even if the scrap market improvesshortages are often
short-lived due to shifts in manufacturing
activityNovelis 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
Were 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 differin some developing
markets, were 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. Its 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 Plcs 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, its hard to develop a
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. Its
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