Aluminum-Clad Ambition

Aluminum producer Novelis Inc., headquartered in Atlanta, has long used aluminum scrap as feedstock in its operations, particularly at the can-sheet plants that were once part of the former Alcan Aluminum Corp.

The company, now a part of India-based Hindalco Industries Ltd., continues to produce can sheet from aluminum scrap in large amounts, but now also produces primary aluminum and alloys for a wide range of industries, including the automotive and consumer electronics sectors.

In 2011, Novelis’ leadership announced an ambitious goal to use scrap as 80 percent of the company’s overall feedstock at its aluminum production facilities worldwide by 2020.

“Novelis is building a supply chain that will reduce its dependence on primary metal mining, smelting and production,” says Derek Prichett, vice president of global recycling at Novelis. “That’s the impetus behind the company’s focus on sustainability as an innovative business model. By relying less on primary metals producers, Novelis not only secures a more consistent and manageable source in input material, but also positions itself as a critical partner to customers looking to increase their own use of recycled material in everything from beverage cans to automobiles to flat screen TVs and other consumer electronics products,” Prichette adds.

Recycling Today Media Group Editorial Director Brian Taylor interviewed Prichett about Novelis’ emphasis on scrap inputs and sustainability.

Recycling Today (RT): How did you become the vice president of global recycling at Novelis?

Derek Prichett (DP): We created this recycling role one year ago, based in part on meeting the objective of using 80-percent-scrap feedstock by 2020. I was named to form a group and lead that process and deliver that objective. In the one year since, I’ve been very pleased that we’ve put a visible dent in meeting the objective.

We’re growing awareness of our theme internally and have set up organizations on the recycling side in each global operating region. We’re working on a broad-based plan that touches all areas of our business—everything from operations to supply chains, technology and the ability to sort and purify different scrap types and inputs.

RT: So you’re happy with the results you’ve seen in year one?

DP: When we started this, our rate was 33 percent based on recycling inputs as of fiscal year 2011. In fiscal year 2012, we managed to increase that to 39 percent. We’re pleased with the initial progress. We feel very comfortable now that we have a good line of sight and a good, executable plan established to get us to at least 50 percent by 2015 and we’re still on our path to 80 percent by 2020.

RT: What are some of the potential barriers to 80-percent-recycled content and how can they be overcome?

DP: We’ve been working hard on increasing our operational capacity to consume recycled materials. In some places we just don’t have the equipment footprint to bring in significantly more recycled material, but we’ve dedicated a significant amount of our capital spend to increase that. For instance, there is a new recycling facility coming online in South Korea that is almost complete now—it will start up in September 2012. We’re making sheet ingot at that plant and bringing in beverage can scrap.

Another major facility is in the design phase and almost ready to start construction in eastern Germany. And a third one announced within the past year is in Brazil. We already have a recycling facility in Brazil but we’re approximately doubling capacity there. Both the German and the [new] Brazilian capacity should be online in 2014.

The Korean facility is similar to our sheet ingot plant in Berea, Ky. The basic design is similar, and, like Berea, the new plant in Korea is using primarily UBCs (used beverage containers) and process scrap from the can industry. The one in Europe has those same capabilities plus expanded capabilities.

We get most of our scrap today from the beverage can market—something like 65 percent. That market only represents a small percentage of the available global aluminum scrap market (maybe 15 percent). The challenge we have is to broaden our input base and buy more scrap from other markets, such as electrical wire and cable, extrusion scrap and automotive-type scrap.

We need some new technology and processing capability to be able to bring some of that scrap in. Novelis’ European facility can do that. It has been designed to be more flexible and multipurpose.

RT: Will UBCs remain an important part of the strategy?

DP: In North America, UBCs are in high demand. In other parts of the world, we can increase our market share. Our goal is to continue to grow our UBC inputs in Asia, South America and Europe. The beverage can market also is growing quickly in South America and in Asia.

The situation in North America is a little different. The beverage can market is more mature, and thus the generation of UBCs is not nearly as high.

RT: Is it your sense that aluminum producers, beverage makers and retailers in the United States are maintaining their historical reluctance to adopt deposit/return methods?

DP: We believe that a deposit system can be a very effective way to increase the recycling rate. Jurisdictions where these systems exist have a much higher recycling rate on average. Recycling rates in the deposit states are in the 70-to-80-percent range compared to a 30-to-40-percent range in nondeposit states. Deposit does work. The concern some of the stakeholders have about deposit is that it’s an expensive system. We think, though, that it can be one of a number of different ways to approach a problem.

Other options include what Florida is doing, involving framework legislation with performance-based incentives and targets.

Novelis is a member of the Curbside Value Partnership (CVP) group. We’d like to see more participants/stakeholders from different industries (such as PET plastic, glass and haulers) become stakeholders in CVP.

RT: What can you say about Novelis’ future collection efforts for forms of aluminum scrap beyond UBCs?

DP: Those recycling rates are already very high.

One thing we’d like to do is to build capabilities to recycle materials where they are generated and then recycle them back into the same product. Closed-loop recycling is a very important model to us. It has been effective in turning cans back into can sheet.

Aluminum is growing as a material within cars. As the amount of aluminum in a vehicle grows, we’d like to establish the same kind of closed-loop thinking as exists in the can market.

As the automotive market has expanded for aluminum, this generates process scrap (prompt scrap). As automotive aluminum consumption grows, you’re generating a whole new loop. It’s kind of a key to our strategy.

Derek Prichett is vice president of global recycling for Atlanta-based Novelis, www.novelis.com.