Novelis, a leader in aluminium rolling and recycling, has announced it will invest approximately US$180m to double its automotive aluminium body sheet capacity at its Changzhou facility in China. The investment will be a continuous annealing solution heat (CASH) treatment line that will add approximately 100 kilo-tonnes of capacity and will include a high-speed slitter as well as a fully automated packaging line. These assets along with our proven operational expertise and first-mover advantage in China will enhance Novelis’ ability to supply innovative aluminium solutions to its global automotive customer base as well as Chinese domestic producers. Novelis expects to begin expanding its existing facility in 2018 in order to be operational by 2020. Upon completion, Novelis expects to create approximately 160 full time jobs.
Since commissioning its initial automotive finishing line in Changzhou in 2014, Novelis has fully contracted its capacity. The timing of this investment is closely aligned with key customer product launches slated for 2020-2021 from both traditional automakers as well as electric vehicle startups.
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“By adding another strategic asset to expand its operations in China, Novelis continues to leverage the strength of the Aditya Birla Group as the global leader in aluminium rolling,” said Kumar Birla, chairman of the board of directors of Novelis and chairman of the board of directors of Hindalco Industries. “Investing ahead of projected customer demand enables Novelis to offer premium products and a reliable supply chain to automakers as they continue to adopt more automotive aluminium.”
Worldwide, automotive aluminium 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 aluminium penetration and production in the market.
“As our customers continue to see aluminium as the material of choice to meet their lightweighting and performance goals, Novelis is strengthening its leadership position in the world’s largest automotive market place,” said Steve Fisher, president and CEO, Novelis. “We believe China’s commitment to fuel efficiency and reducing emissions represent a large and favourable opportunity that will require greater adoption of aluminium, particularly in the rapidly growing electric vehicle market.”
According to IHS Markit, total passenger vehicle demand in China is expected to reach 34m units by 2025, with strong market growth coming from battery electric vehicles.
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By GlobalData“Novelis has always had great commitment to the Chinese market and this investment is key to leading the next-phase of market development here,” said James Liu, managing director of Novelis China, and vice president, Automotive, Novelis Asia. “By adding not just manufacturing capacity, but also design and innovation capabilities, Novelis will be even more customer-centric and deeply devoted to promoting aluminium applications in the Chinese market.”
Novelis’ investment in China is its second automotive investment this year, having recently announced a $300m greenfield manufacturing facility in Guthrie, Kentucky, US.
