Novelis Inc., the world leader in aluminum rolling and recycling, said it will invest approximately USD 180 million to double its automotive aluminum 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 kilotonnes of capacity and will include a high-speed slitter as well as a fully automated packaging line. These assets will enhance Novelis’ ability to supply innovative aluminum 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.
“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 aluminum rolling,” said Kumar Mangalam Birla, chairman of the board of directors of Novelis Inc. and chairman of the board of directors of Hindalco Industries Limited. “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 aluminum.”
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.
“As our customers continue to see aluminum 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 Inc. “We believe China’s commitment to fuel efficiency and reducing emissions represent a large and favorable 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 34 million units by 2025, with strong market growth coming from battery electric vehicles.
“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 aluminum applications in the Chinese market.”
Novelis’ investment in China is its second automotive investment this year, having recently announced a USD 300 million greenfield manufacturing facility in Guthrie, Kentucky, U.S.A.