US aluminum firm Novelis expands capacity in China

US aluminum company Novelis Inc said it would invest about $180 million to double its automotive aluminum body sheet capacity in China, as it seeks to tap demand from the country’s growing electric vehicle (EV) sector.

The Atlanta-based company, which is owned by India’s Aditya Birla Group, said the investment would add about 100,000 tons of capacity at its plant in Changzhou, East China’s Jiangsu Province, with the new operations to begin by 2020.

“The timing of this investment is closely aligned with key customer product launches slated for 2020-21 from both traditional automakers as well as electric vehicle start-ups,” Novelis said in a statement, adding that existing automotive finishing line capacity in Changzhou was already fully contracted.

The expansion comes amid a simmering trade dispute between the US and China in which aluminum has featured heavily, with the US slapping 10 percent tariffs on aluminum imports, as well as punitive duties on Chinese aluminum foil and common alloy sheet.

Novelis’ statement, which was issued in China on Thursday, made no mention of exports back to the US from Changzhou, while stressing that China was the world’s biggest auto market.

The company did not immediately respond to a request for comment on other potential target markets.

“Worldwide, automotive aluminum demand is projected to nearly triple over the next eight years with the largest growth potential to be in China, as both domestic and global automakers increase aluminum penetration and production in the market,” Novelis said.

It expects to create about 160 full-time jobs once the expansion is completed.