Novelis Investing $400 Million to Grow its Operations in Asia

Novelis Inc., headquartered in Atlanta, has announced plans to invest about $400 million to expand its aluminum rolling and recycling operations in South Korea. The investment decision has been made in response to the growing demand for its products in Asia and the Middle East.

The rolling expansion will include investments in both hot rolling and cold rolling operations, and will increase Novelis' aluminum sheet capacity in Asia to one million metric tons per year. According to a Novelis release, the move is designed to bring to market high-quality aluminum rolling capacity aligned with the needs of its Asian 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 CEO of Novelis. "Asia is the largest and fastest growing region in the world for aluminum, particularly in beverage cans, electronics and automobiles. This expansion will allow us to maintain our leadership in this dynamic region."  

"Our analysis clearly shows that expanding our capacity in Korea is the best approach to serve increasing demand from our customers in these regions," Martens adds. "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' aluminum sheet capacity in Asia by more than 50 percent, and will include the construction of a recycling center for used aluminum beverage cans (UBC) and a casting operation with annual production capacity of more than 220,000 metric tons of sheet ingot.

Novelis currently recycles UBCs from across Asia into new can sheet in partnership with third party processors. Novelis’ new recycling center at Yeongju, Korea, will be Novelis' first integrated recycling and casting facility in Asia.

Tom Walpole, senior vice president, global manufacturing excellence, and president, Novelis Asia, points to significant economic development factors as the driving forces in the company's expansion plans. "The recycling investment will be in our Yeongju plant, and is in no small way a credit to the leadership of our Yeongju union representatives and employees."

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

Novelis Korea Ltd., a subsidiary of Novelis Inc., has two integrated rolling facilities in Yeongju and Ulsan, South Korea, both of which have casting, hot rolling, cold rolling, finishing and recycling capabilities.