Novelis announces expansion plans in South Korea

Aluminium manufacturer Novelis has announced that it will invest US$400 million in the expansion of its aluminium rolling and recycling operations in South Korea.

The company has made the decision in response to the growing demand for its products in Asia and the Middle East.

The rolling expansion, which will include investments in both hot rolling and cold rolling operations, will increase Novelis’ aluminium sheet capacity in Asia to one million metric tons annually.

A response to projected market growth in the region, the move is designed to rapidly bring to market high-quality aluminium rolling capacity aligned with the projected needs of a growing customer base. The new capacity is expected to come on stream in late 2013.

“This investment represents a key step in executing Novelis’ strategy for future growth,” says Phil Martens, president and chief executive officer of Novelis. “Asia is the largest and fastest growing region in the world for aluminium, particularly in beverage cans, electronics and automobiles, and this expansion will allow us to maintain our leadership in this dynamic region.”

The move follows a year-long assessment by Novelis of strategic opportunities to serve rapidly growing markets in Asia and the Middle East. “Our analysis clearly shows that expanding our capacity in Korea is the best approach to serve increasing demand from our customers in these regions,” adds Martens. “The quality of our existing operations and assets in Korea, the expertise of our management there, the experience and stability of our workforce, a readily available metal supply, speed to market and return on invested capital all make this expansion the best strategic approach to serving customer needs.”

The expansion will increase Novelis’ aluminium sheet capacity in Asia by more than 50%, and will also include the construction of a state-of-the-art recycling centre for used aluminium beverage cans and a casting operation with annual production capacity in excess of 220,000 metric tons of sheet ingot.

The recycling component of the investment is further indication of Novelis’ emphasis on recycling as a core part of its business. Novelis currently obtains used aluminium beverage cans from across Asia and recycles them into new can sheet in partnership with third party processors. The new recycling centre at Yeongju will be Novelis’ first integrated recycling and casting facility in Asia. The company is already a leader in can recycling in North America, Europe and South America.

“Our growth strategy has a strong foundation on sustainability,” explains Martens. “We are committed to reducing our environmental footprint – and those of our customers – over the lifecycle of our products through increased recycling. This investment continues our ongoing commitment to benefit the environment by reducing greenhouse gas emissions, conserving energy and natural resources, and lowering waste generation.”

Tom Walpole, senior vice president, global manufacturing excellence, and president, Novelis Asia, added: “The growing consumption of beverages in developing Asian countries, the conversion of steel can making lines to aluminium, the expanding use of aluminium in consumer electronics, and China’s emergence as the largest automotive market in the world are all factors boosting demand for our products in Asia.”

The new recycling and casting facility is expected to begin operations in late 2012.

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