The material of choice
The name of Novelis is still relatively new in the ‘old’ can business. David Gill, global account director, tells us about the origin of Novelis.
“I have been in or around the can business for 25 years with Ball Corporation, Anheuser-Busch and Novelis, which I joined right after it was spun off from Alcan,” he says.
As a result Novelis inherited the core assets and the manufacturing know-how from Alcan. Alcan had constructed a large number of rolling mills, several of which are now the largest rolling operations in the areas where Novelis operates.
The Novelis facility in Norf, Germany, operates the world’s largest aluminium rolling mill and its mill in Pindamonhangaba, Brazil, is the country’s only producer of aluminium can sheet and these are just two examples.
Gill adds, “More recently we have grown through expansions and the modernisation of our existing mills. These have increased our capabilities in recycling and rolling of can stock.”
In 2007, Hindalco Industries acquired Novelis. Hindalco is part of the Aditya Birla Group, a multinational conglomerate with its headquarters in Mumbai, India. Novelis became a wholly owned subsidiary of Aditya and Hindalco became the world’s largest aluminium rolling company.
The can market
Aluminium was first produced in an impure form from as early as 1825, however production of a better aluminium alloy in much bigger quantities only took off in the early 1900s after the development of the Hall-Héroult electrolytic process. The use of aluminium for can making started towards the end of the 1950s, but after that developments moved forward.
In particular, the development of the DWI process and later on the addition of aluminium easy open ends on top of cans provided an enormous boost to the beverage can market. In Europe, the use of tinplate to make two-piece beverage cans was developed in the 1970s. For many years the market share for beverage cans was split equally between tinplate and aluminium. However, over time tinplate lost its market share as two-piece DWI beverage can lines were almost uniquely equipped for the use of aluminium can stock. Now more than 85 per cent of the world’s beverage cans are made from aluminium and Novelis is quite confident the market will keep growing.
Supply and demand
“We foresee a steady growth of around four to five per cent annually for aluminium cans in the years to come,” explains Gill. “In particular, this market growth will take place in Asia and South America. The already large can market in Brazil will get an extra boost because of the World Cup in 2014 and the Olympic Games in 2016. We therefore have major capacity expansions underway in Asia and South America to prepare for this growth. If you look at the global picture, there is perhaps currently a little more can making capacity than is needed, but we are sure demand and supply will balance out again in the next couple of years. We have longstanding relationships with all of the global can makers and also with some of the brand owners behind them. For example, in 2012 we renewed our long relationship with Coca-Cola North America with a new multi-year agreement to remain its primary supplier of aluminium can sheet.”
Investments in recycling capacity
Novelis has a firm belief in the environmental advantages and the economic viability of recycling aluminium cans. Increasing the recycled metal input into the production of new aluminium saves valuable natural resources in a dramatic way. Using recycled aluminium as input material requires only five per cent of the energy used to make primary aluminium from raw materials.
“Aluminium is the world’s most recyclable can-packaging material. Used beverage cans are melted down and turned into a new can inexpensively and efficiently, with a ‘can-to-can’ cycle of about 60 days. As the world’s largest recycler of aluminium, we operate recycling facilities on four continents and we drive increased recycling across the globe,” notes Gill. “We have set ourselves a bold target, which is to reach 80 per cent recycled metal input across our products by the year 2020. This is a real key component of our strategy. We have already made a substantial step towards our target with an increase of six per cent in our first year from 33 to 39 per cent. And when we talk about recycling cans, we mean can-to-can recycling, as we want to keep the recycled input as pure as possible to avoid downcycling.”
In Brazil, Novelis is investing approximately US$350 million over three years. Capacity increases in aluminium rolling and recycling will come on stream in late 2013. In South Korea, the investments in aluminium rolling and recycling capacity amounted to US$400 million.
Novelis is currently in the process of constructing a new recycling plant in Germany at a cost of US$250 million. The new aluminium recycling and casting centre is being constructed next to the company’s existing aluminium rolling mill in Nachterstedt.
Speaking at the ground breaking ceremony in November last year, Phil Martens, president and chief executive of Novelis, said, “This investment represents another step in delivering on our commitment to dramatically increase the recycled content of the rolled aluminium sheet we provide to our global customers, while also signifying our long term commitment to the European market. The advanced sorting, processing and casting capabilities of the new Nachterstedt operation will propel us closer to our goal of 80 per cent recycled content by 2020.” The recycling plant is due to be commissioned in mid-2014.
Improving aluminium beverage cans
Though aluminium beverage cans have existed for more than 50 years, there has been continuous research and innovation over this time, in which Novelis has played a central role. The company has contributed a lot to obtain the current quality level and the high degree of consistency in quality seen in aluminium can stock supplied today. According to Novelis, aluminium beverage cans are the subject of ongoing technical refinement and innovation.
“Within Novelis there is a lot of technological expertise in our global research and technology centre in the US and in our laboratories in Asia, Europe and South America,” remarked Gill. “We work closely together with our customers in their facilities if required. But we also have our own pilot lines to assist with customised packaging solutions and more efficient manufacturing processes. An important priority in our research and development work is lightweighting, while maintaining an acceptable can performance level. Another important initiative is further research into increasing recycled content. Like many other companies we are working on BPA-free coatings in order to meet the requirements of our customers. One way to obtain this may be through laminate coatings. In conclusion, we focus on continuous innovation to continue to establish the beverage can as ‘the material of choice’.” ❑