Novelis to set up $2.5bn aluminium plant in US

MUMBAI: Novelis, a unit of Hindalco, will invest $2.5 billion to build a new low-carbon aluminium recycling and rolling plant in Bay Minette, Alabama (US). Hindalco, controlled by billionaire Kumar Mangalam Birla, had bought Novelis, based in the US, for $6 billion in 2007.

This will be the largest greenfield expansion project of Birla globally and will take his group’s total investment in the US across businesses to over $14 billion. Site work is under way and Novelis anticipates the aluminium plant to begin operations in mid-2025.

The plant, which will be powered by renewable energy, use recycled water and be a zero-waste facility, will be the first fully integrated aluminium mill built in the US in 40 years, a statement from Novelis said. It is expected to create at least 1,000 new jobs in Bay Minette.

“This investment marks the start of another transformational growth phase for Novelis,” said Birla, who is also the chairman of Novelis, which had sales of $17 billion in fiscal 2022. While some Indian groups have been cutting down their investments in manufacturing overseas, others like Birla are ramping up production capacity outside of India.

The Bay Minette facility will have an initial capacity of 6 lakh metric tons of finished aluminium goods annually. More than half of the output will go to beverage can makers, while the remaining will make aluminium sheets for the automotive and aerospace industries.

With the addition of a new recycling facility, Novelis will soon be able to recycle 90 billion cans globally, up from the 74 billion used beverage cans the company currently recycles, it added. Demand for cans have increased in recent years as the beverage industry seeks to reduce its dependence on plastic containers amid consumer concerns about waste and impact on environment.

Beverage makers are more and more turning to aluminium to be the packaging alternative, said Novelis CEO Steve Fisher. “We have a lot of confidence in the sustainable growth in this market.” Aluminium beverage cans, bottles and cups are the models of sustainable packaging and the circular economy. With an average ‘can-to-can’ lifecycle of just a couple of months, a can that is recycled today can be back on store shelves in as little as 60 days, Novelis said.