Novelis to invest $2.5 billion in low-carbon recycling US plant

MUMBAI: The American unit of Hindalco Industries Ltd, the world’s largest aluminium rolling company, will invest $2.5 billion to build a new recycling and rolling plant in the US in the largest greenfield expansion plan by the parent Aditya Birla Group. The Novelis Inc. facility in Alabama will have an initial annual capacity to produce 600 kilotonnes of finished aluminium goods and will be completed by FY26, the company said.

The latest announcement takes capex plans committed by Novelis to $3.4 billion, with four other new capex initiatives underway, two in the United States and one each in South Korea and China.

The company has committed to investing $365 million to build a recycling plant in Kentucky, US, and a $375 million cold mill in Zhenjiang, China.

“This investment marks the start of another transformational growth phase for Novelis,” Kumar Mangalam Birla, chairman of the Aditya Birla Group, said in a statement.

“We continue to invest in each of the markets Novelis serves— from the beverage can to automotive, aerospace and specialities—and in all geographies. This is also the largest global greenfield expansion project of the Aditya Birla Group and will take the group’s total investment in the US across businesses to over $14 billion,” Birla added.

More than half of the capacity of the new facility will be used to serve the growing demand for aluminium beverage can sheets in North America, which is driven by consumer preference for more sustainable packaging, the statement said.

The company added that the decision to build the recycling and rolling plant is backed by strong North American demand for flat-rolled, low-carbon aluminium from can makers and beverage companies.

Aluminium beverage cans, bottles and cups are the models of sustainable packaging and the circular economy, the company said, adding that with an average “can-to-can” life cycle of just a couple of months, a can that is recycled today can be back in store shelves in as little as 60 days.

“In addition, we are well-positioned to efficiently expand capacity at this facility in the future—above the 600kt announced today—to capture ongoing strong demand. Our readiness to invest in serving growing markets is a perfect example of how we are delivering on our company purpose of shaping a sustainable world together,” said Steve Fisher, president and chief executive officer of Novelis.

The facility will be the first fully integrated aluminium mill built in the US in 40 years, the company said. It is expected to create up to 1,000 high-paying jobs in modern manufacturing.

The facility will be powered primarily by renewable energy, use recycled water and be a zerowaste facility, the company further said.