Aluminum rolling and recycling company Novelis, headquartered in Atlanta, has completed the transaction for its joint venture with Tokyo-based Kobe Steel Ltd., a producer of aluminum rolled products. The Ulsan Aluminum Ltd. joint venture was formed when Novelis sold Kobe Steel its ownership interest in its Ulsan, South Korea, facility for $315 million. Novelis and Kobe Steel together own the Ulsan Aluminum facility, with each company remaining responsible for its own metal supply and commercial relationships, Novelis says in a news release announcing completion of the joint venture.
The Ulsan Aluminum plant is in the industrial hub of Ulsan, South Korea. It supports increasing demand for high-strength and lightweight aluminum for automotive and specialty products, including electronics and building materials, in Asia. The plant recently completed an expansion, adding a new three-stand hot finishing mill, as well as a pusher furnace and annealing furnaces. All 600 employees at the plant are now employed by Ulsan Aluminum. In addition, the transaction will generate cash proceeds to enhance Novelis’ strategic flexibility and reduce its net debt, the company says.
“This strategic partnership further supports Novelis’ continued commitment to growth in the Asian automotive industry and creates new capabilities to meet the increasing demand for aluminum sheet,” says Sachin Satpute, president of Novelis Asia. “Through an increase in operational efficiencies and process enhancements, this partnership will provide our global customers greater access to the numerous benefits of aluminum.”
As automotive sales continue to increase in Asia, Novelis’ interest in Ulsan Aluminum will remain a key part of its current Asian portfolio, which also includes the Yeongju facility in South Korea and the Changzhou facility in China, the company says.
“Ulsan Aluminum is committed to providing first-class rolled aluminum products and services to benefit our customers in the region,” says Jerry Quick, president and CEO of Ulsan Aluminum Ltd. “We will continue to operate with a high-quality and safety-first mentality and will support the local market with innovative aluminum products.”