Novelis to invest $200 million to boost capacity

The aluminum firm Novelis, with U.S. headquarters in Atlanta, has announced plans to invest an additional $205 million to expand its global manufacturing operations that target the automotive market. The investment will include building new finishing lines at Novelis plants in Oswego, N.Y. and Nachterstedt, Germany, which are dedicated to producing aluminum automotive sheet.

The two new lines will each have a capacity of 120,000 metric tons per year.

In a press release, the company says that its latest expansions are in response to the escalating global demand from automakers for aluminum sheet, which the company expects to grow by more than 30 percent per year through the end of the decade. When the new lines are commissioned in late 2015, Novelis says its global automotive sheet capacity will reach about 900,000 tons per year, a three-fold increase from just a year ago.

"With the addition of these two new lines, we have invested nearly $550 million to expand Novelis' global automotive capacity in the last two years alone," says Phil Martens, Novelis’ president and CEO. “This commitment—backed by our history of automotive technology innovation, volume production experience and unmatched global footprint—strengthens our recognized leadership position as the partner of choice for world-class automotive manufacturers.”

In addition to the new lines, the company recently commissioned two new finishing lines at its Oswego, N.Y., 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.

Novelis reports that both expansions will further the development of its automotive closed-loop business model. At the present time as much as 50 percent of automotive sheet sold to automakers is left over after a manufacturing plant stamps out automotive parts. The company is working with its customers to return this material directly back to Novelis for recycling, streamlining the materials supply chain while reducing the total carbon footprint of the entire automotive production cycle.

The company will invest approximately $120 million to install a third aluminum automotive sheet finishing line at its Oswego 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 tons in just two years. When complete, the Oswego facility will devote 80 percent of its total capacity to serving the automotive market.

The company will invest about $85 million to install an 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 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, Germany, which is expected to be commissioned in late 2014.