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Novelis to fight for scrap, step up investments

Keywords: Tags  Marco Palmieri, Novelis, scrap, UBCs, automotive aluminum, aluminum, Michael Cowden

SAN ANTONIO — Novelis Inc. is prepared to compete hard for scrap to meet its recycled content goals and increased automotive demand, a company executive said.

But to hit those targets—80-percent recycled content by 2020 and 50 percent by 2015—the Atlanta-based company will have to compete and invest in its scrap capabilities in North America, Novelis North America president Marco Palmieri said.

"We will be there (80 percent by 2020)," he said during a press conference at the Aluminum Association’s spring meeting in San Antonio April 2. "We have a very good idea of what we have to do, but it will require more investments in North America in recycling capacity. And we will have to work ... to develop new alloys and new products that can use more scrap and less primary."

Palmieri declined to reveal exactly what form those investments might take in North America, but pointed to similar efforts abroad such as Novelis’ $250-million investment to boost its recycling capabilities in Germany (, June 7). The plant is "starting up" with plans to ramp up to an annual capacity of 250,000 tonnes per year, he said.

"That facility will process everything you can imagine in terms of scrap," he said. "And the future of the recycling centers is somewhat like that."

The push to boost recycling capability comes as Novelis has worked to process material other than "easy scraps" such as used beverage cans (UBCs), Palmieri said, although he acknowledged that the company faces a fight for metal in the scrap arena.

"It’s like any product you have healthy competition for. You just have to compete," he said. "The players are very serious, and it’s good for the industry."

Meanwhile, Novelis continues to see big opportunities for aluminum as automakers and other segments of the transportation sector remain focused on making lighter and more fuel-efficient vehicles, Palmieri said. That’s why it has boosted automotive heat-treat capacity in North America to about 400,000 tonnes annually from 50,000 tonnes per year, he said.

"That’s big growth. And most of this capacity is already committed," he said, declining to disclose whether Novelis was planning additional capacity to meet expected strong demand from the transportation sector.

"We continue to talk to our OEMs (original equipment manufacturers). They have to meet some very stringent regulations from the government," Palmieri said, noting that the average U.S. light vehicle now gets about 29 miles per gallon but will be required to reach 54.5 miles per gallon by 2025.

"Aluminum is a great material to help the automotive industry to get there, and clearly all the OEMs are very interested in going to aluminum," he said. "We have been talking to them, helping them, working with them, to develop the next car."

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