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Swaraj Singh Dhanjal

Novelis to invest $2.5 bn in US plant

Aditya Birla Group chairman Kumar Mangalam Birla (Photo: Bloomberg)

The Novelis Inc. facility in Alabama will have an initial annual capacity to produce 600 kilotonnes of finished aluminium goods and will be completed by FY26, the company said on Wednesday.

In the pipeline

The latest announcement takes capex plans committed by Novelis to $3.4 billion, with four other new capex initiatives underway, two in the US and one each in South Korea and China.

The company has committed to investing $365 million to build a recycling plant in Kentucky, US, and a $375 million cold mill in Zhenjiang, China.

“This investment marks the start of another transformational growth phase for Novelis," Kumar Mangalam Birla, chairman of the Aditya Birla Group, said in a statement.

“We continue to invest in each of the markets Novelis serves—from the beverage can to automotive, aerospace and specialities—and in all geographies. This is also the largest global greenfield expansion project of the Aditya Birla Group and will take the group’s total investment in the US across businesses to over $14 billion," Birla added.

More than half of the capacity of the new facility will be used to serve the growing demand for aluminium beverage can sheets in North America, which is driven by consumer preference for more sustainable packaging, the statement said.

The company added that the decision to build the recycling and rolling plant is backed by strong North American demand for flat-rolled, low-carbon aluminium from can makers and beverage companies. Aluminium beverage cans, bottles and cups are the models of sustainable packaging and the circular economy, it said, adding that with an average “can-to-can" life cycle of just a couple of months, a can that is recycled today can be back in store shelves in as little as 60 days.

“In addition, we are well-positioned to efficiently expand capacity at this facility in the future—above the 600kt announced today—to capture ongoing strong demand. Our readiness to invest in serving growing markets is a perfect example of how we are delivering on our company purpose of shaping a sustainable world together," said Steve Fisher, president and chief executive officer of Novelis.

The facility will be the first fully integrated aluminium mill built in the US in 40 years, the company said. It is expected to create up to 1,000 high-paying jobs in modern manufacturing.

The facility will be powered primarily by renewable energy, use recycled water and be a zero-waste facility, the company said.

“It will also rely on railroad transportation, which can reduce logistics-related carbon emissions by up to 70% compared to road transport. The plant will make significant use of advanced automation and digital technologies, including artificial intelligence, augmented reality and robotics," it added.

The addition of the new recycling centre for beverage cans will allow Novelis to recycle 90 billion cans globally, up from the 74 billion used beverage cans the company currently recycles.

On Wednesday, Novelis also announced its financial results for the year ended 31 March. The company reported a fourfold jump in profit to $954 million.

“We achieved record full-year results and crossed notable financial milestones for Adjusted Ebitda and net income, reflecting a continued focus on meeting strong customer demand for infinitely recyclable aluminium products while striving to advance our business and industry toward a more circular economy," Fisher said.

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