Aditya Birla Group's Novelis to invest $180m in China to double its capacity

US-based industrial aluminium rolling and recycling company, Novelis a subsidiary of Hindalco Industries, the flagship metal company owned by India's Aditya Birla Group, is to invest around $180 million (Rs 1,230 crore) to double its automotive aluminium body sheet capacity at the Changzhou facility in China.

The investment will contribute towards the continuous annealing solution heat (CASH) treatment line, which will add around 100 kilotonnes of capacity and will include a high-speed slitter as well as a fully automated packaging line.

Novelis is a subsidiary of Hindalco Industries, a metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India.

This move to double the capacity is aimed at improving Novelis' ability to supply innovative aluminium solutions to its global automotive customer base as well as Chinese domestic producers. Novelis expects to expand its existing facility in 2018 in order to be operational by 2020. Upon completion, Novelis expects to create approximately 160 full-time jobs.

Kumar Mangalam Birla, chairman of the board of directors of Novelis and chairman of the board of directors of Hindalco Industries said, "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. 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."

The company claims as per expert analysis, automotive aluminium demand in the world 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.

Steve Fisher, president and CEO, Novelis, said, "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 marketplace. We believe China's commitment to fuel efficiency and reducing emissions represent a large and favourable opportunity that will require the greater adoption of aluminium, particularly in the rapidly growing electric vehicle market."

According to IHS Markit, the passenger vehicle demand in China is expected to reach 34 million units by 2025, with strong market growth coming from battery electric vehicles.

James Liu, managing director of Novelis China, and vice president, Automotive, Novelis Asia said, "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."

The new investment in China is Novelis second investment for the automotive industry this year. In January 2018, Novelis had announced a $300 million (Rs 2,050 crore) greenfield manufacturing facility in Guthrie, Kentucky, USA.

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