Hindalco arm Novelis expanding capacity in US, Germany

Novelis, the US subsidiary of Aditya Birla Group flagship Hindalco Industries Ltd, will invest an additional $205 million to further expand its global manufacturing operations of automotive grade aluminium, in order to cater to a rapidly growing market.

Novelis, the global leader in aluminum rolling and recycling, will build new finishing lines at its plants in Oswego in New York and Nachterstedt in Germany, dedicated to the production of aluminum automotive sheet.

The two new lines will each have a capacity of 120,000 tonnes a year, Novelis said in a statement.

When the new lines are commissioned in late 2015, Novelis's global automotive sheet capacity would go up to about 900,000 tonnes a year, a three-fold increase from a year ago.

The latest expansions are in line with the escalating global demand from automakers for aluminum sheet, which the company expects to grow by more than 30 per cent per year through the end of the decade.

Novelis is the world's leading provider of aluminum automotive sheet, which auto manufacturers find increasing use for structural components and exterior body panels. Novelis supplies aluminum to more than 180 different vehicle models produced by leading automakers around the globe.

Aluminum is becoming the sustainable choice for the latest generation of vehicles because of its low weight and recyclability enabling reduced life cycle emissions.

"With the addition of these two new lines, we have invested nearly $550 million to expand Novelis's global automotive capacity in the last two years alone," said Phil Martens, Novelis president and chief executive.

"This commitment - backed by our history of automotive technology innovation, volume production experience and unmatched global footprint - strengthens our recognised leadership position as the partner of choice for world-class automotive manufacturers."

The company is investing around the world to boost its automotive finishing capabilities. In addition to the two new lines, the company recently commissioned two new finishing lines at its Oswego, New York plant.  In addition, a new plant is under construction in Changzhou, China, which is expected to commence production in mid-2014.

The company also recently certified automotive production at its Gottingen, Germany, plant that complements the company's existing automotive facilities in Kingston, Ontario, Canada; Sierre, Switzerland and Nachterstedt, Germany.

The company will invest approximately $120 million to install a third aluminum automotive sheet finishing line at its Oswego, NY plant.

In addition, the company will expand its recycling operations for automotive scrap, while also making other system and facility upgrades.

This new investment will result in 90 new jobs at the plant and will increase the company's North American automotive sheet capacity to more than 400,000 metric tonnes in just two years. When completed, the Oswego facility will devote 80 per cent of its total capacity to serving the automotive market.

The company will invest approximately $85 million to install one new aluminum automotive sheet finishing line at its Nachterstedt, Germany facility.

This expansion will create up to 120 new jobs at the plant and increase the company's aluminum automotive sheet capacity in Europe to almost 350,000 metric tons.

The expansion will also enhance the developing automotive closed-loop model between the company's recycling operations in Latchford, UK, and what will be the world's largest aluminum recycling center, a $250 million project at Nachterstedt expected to be commissioned in late 2014, Novelis said.