Novelis Inc. plans to build a $2.5 billion low-carbon aluminum recycling and rolling plant in the US to cater to the growing demand for beverage can sheets and the automotive market.
The facility, which will be built in in Alabama, will have a capacity of 600,000 tons of finished goods a year initially, the unit of Hindalco Industries Ltd. said in a statement. Work at the site is under way and the company expects to begin operations by the middle of 2025, it said.
More than half the capacity will be used to meet the rising demand for aluminum beverage can sheets in North America, as consumers seek more sustainable packaging, the company said. The new facility will increase Novelis’s recycling capacity to 90 billion cans globally, from 74 billion currently, it said.
“It’s really on the back of a resurgence of beverage cans as the most sustainable solution from a packaging standpoint,” Steve Fisher, the chief executive of Novelis, said in a phone interview. “You’re seeing it from our customers preferring more and more infinitely recyclable aluminum.”
North American can demand was effectively flat between 2010 and 2018, but Fisher said canmaking investments have totaled about $4 billion since then as consumers increasingly have ditched plastic for more sustainable packaging. That’s enough to produce some 38 billion new cans annually amid rapidly expanding shortages that have forced companies to air ship cans from Brazil, Saudia Arabia and Asia.
This will be billionaire Kumar Mangalam Birla’s Aditya Birla Group’s largest global greenfield expansion project and will take the group’s total investment in the US across businesses to over $14 billion, it said. The Mumbai-based company has been on an expansion spree buoyed by strong demand prospects and higher prices of the metal.
Hindalco said in March that it will spend as much as $7.2 billion to expand its aluminum business over the next five years, mainly across India and North America. Earlier this year, Novelis had announced an investment of $365 million to build a recycling plant in Kentucky.
The new facility will aim to be net carbon neutral for the emissions generated by itself and for its energy consumption, according to the statement. It will also rely on railroad transportation, which can reduce logistics-related carbon emissions by up to 70% compared with road transport, the company said.
(By Swansy Afonso and Joe Deaux)