Novelis to debottleneck, expand across globe

Novelis Inc, the aluminium rolling giant that’s part of the Aditya Birla Group, has chalked out ambitious expansion and debottlenecking plans across the globe.

The company will also increase recycling capabilities by a third to 200,000 metric tonne per annum.

Philip Martens, president and chief executive officer, Novelis, said $80 million will be spent in a debottlenecking exercise across the globe, “which will lead to substantial capacity release in a few years”.

He was addressing investors at a conference call on Tuesday evening after announcing the company’s results.
Novelis had earlier said 3-4% of capacity will get released every year through debottlenecking from the current fiscal through 2014.

The exercise, Martens said, will increase the company’s Ebidta by around $30 million annually.

The maximum debottlenecking will happen in Europe, followed by Asia, United States and South America.

And recycling, Marten said, “throws up a lot of benefits”.

“By enhancing recycling ability, the company gets access to more clients, and has a low-cost alternative as well; it is the apt answer from a sustainability perspective,” he said.

The recycling project will be through an investment of $50 million.

Martens said Novelis is also keen on strategic initiatives, which includes expansion of its Brazil mill, which is on time and within cost. It is also aggressively exploring growth in Asia.   

For the quarter ended December 2010, the company reported a net loss of $46 million as against a net profit of $68 million for the corresponding period last year.

This was mainly because of a charge of $74 million for refinancing of debt and $20 million for restructuring activities.

“With a strong global market demand across all the four regions, and with good numbers in this quarter, we expect to cross $1 billion of adjusted Ebidta for financial year 2011,” said Marten.