North American can market remains important to Novelis Inc.
even if it is in decline and unlikely to reverse course in the
short term, a company executive said.
Besides remaining a
large-volume market, it may also see growth in the future,
particularly if Novelis can develop a can made with 100-percent
recycled material, Marco Palmieri, senior vice president and
president of Novelis North America, said in an interview with
Such a product,
referred to by the Atlanta-based aluminum company as "Evercan,"
has the "potential to be a game-changer in the market,"
Palmieri said. The current decline in can demand is driven in
part by health-conscious consumers drinking less soda and
opting instead for healthier beverages.
But those same
consumers might embrace a completely recycled product, Palmieri
said. "I strongly believe in that. Consumers will go after new
Novelis can guarantee
70-percent recycled content in its can products overall and
90-percent recycled content in the sheet used to make can
bodies, Palmieri said. Among the sticking points are the head
of the can, where magnesium and prime aluminum is needed for
hardness, he said. "We basically have to change the alloy. And
then how do you make a can head that is compatible with the can
body? ... Thats really the technical challenge we have to
resolve." Given the complexity of the task, Novelis
doesnt have a firm timeline for reaching a 100-percent
recycled can but is pushing to gradually increase recycled
content, he said.
In the meantime, the
North American can market is grappling with excess capacity
that is driving down prices and hurting the entire supply
chain, Palmieri said. "Im a firm believer that everyone
has to make money: our suppliers, us and our customers."
The supply glut could
be reversed as Novelis and its competitors allocate capacity
away from the can market and toward growing automotive demand,
Palmieri said. "That will reduce the availability of hot mill
time for the can market, and it will probably change the
dynamics of (the can) market."
The can market remains
a growth sector in Asia, South America and Europe as
traditional materials, such as steel and glass, are replaced
with aluminum, Palmieri said, estimating worldwide annual can
market growth at roughly 4 to 5 percent.