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Novelis to favor brownfield expansion: exec

Keywords: Tags  Novelis Inc., aluminum, roller, recycler, expansion, brownfield, automotive market, can market product mix

CHICAGO — Novelis Inc. will lean toward brownfield heat-treat expansions instead of greenfield hot-mill additions as it aims to boost automotive sheet capacity in the United States and Europe, the company’s top executive said.

The potential expansions come as the Atlanta-based aluminum roller and recycler looks to expand its automotive portfolio from about 7 percent today to 25 percent in the next four to five years, Novelis president and chief executive officer Philip Martens told AMM Nov. 11.

The company’s current mix outside of automotive is 65- to 70-percent can, with the balance being regional specialty and light-gauge products today, Martens said. The can mix is expected to dip to 50 percent in the future, he said.

"We’re obviously looking at how best to handle that (automotive) growth and that leads us to a lot of different analyses and evaluations. We are well down the road on a couple of them. And we’re finalizing those over the balance of this quarter," Martens said, referring to potential growth projects in the United States and Europe.

Martens declined to provide specific details about any of the potential expansions but said they "will be automotive" and would likely involve additional automotive finishing capacity. Any new expansion will likely be brownfield given the company’s recent success with such projects, Martens said.

Novelis should have enough global hot-mill capacity for the next two to three years, Martens said. In the meantime, Novelis isn’t concerned about potential automotive aluminum overcapacity even as competitors expand as well, he said.

Novelis is also making progress in scrap processing, Martens said, including, "technical advancements ... in separation of scrap, pulling out aluminum from a variety of materials that we bring in as well as melt-loss efficiency improvements and casting improvements," he said.

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