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Rapid increase in per-capita disposable income of Brazil encourages Novelis to invest another $300 million in aluminum can manufacturing plants

 

Novelis plans to invest $300 million in Brazil in a bid to expand its aluminum rolling operations in the country. The company announced on Friday that it would invest around $300 million in its expansion plans in the Brazilian market via its Pindamonhangaba plant; to increase its rolling operations in order to meet the burgeoning demand for the company’s products in South America.

 

It is expected that the company’s plant capacity will rise more than 50% to over 600,000 metric tones of aluminum sheet per annum with these new expansion plans. The investment project that includes the addition of a third cold rolling mill, a new ingot casting center, a new pusher furnace for the hot rolling mill and other various supplementary improvements, is expected to come on stream by late 2012.

 

The company’s President and Chief Operating Officer said that it was experiencing a strong increase in demand in their South American market segment especially for the beverage can sheets. Growing per capita income and shifts in consumer behavior was driving double digit growth in demand for the company’s beverage cans by its South American customers and this expansion in Brazil will allow the company to keep at par with that demand. 

 

According to the Brazilian Association of Highly Recyclable Cans Manufacturers, cans sales grew by 11.7% in 2009, accounting for a consumption of 14.8 billion units or about 40.5 million aluminum cans a day. This investment is the single biggest capital investment the company has made ever since it began operations five years ago and is a reflection of the company’s reinforced financial position that has enabled it to make vital, strategic investments to support future growth.

 

Novelis is currently the leading manufacturer of aluminum products in South America and operates an additional foil mill at Santo Andre, two aluminum smelters at Ouro Preto and Aratu, and another nine hydroelectric plants in the state of Minas Gerais. The aluminum can recycling rate in Brazil is currently pegged at over 91%, placing the country amongst world leaders in beverage can recycling.

 

Novelis leads in South America in cans recycle with around 8 billion cans processed by the company last year; a significant economic and environmental conservation achievement.  Novelis Senior Vice President acknowledged the company’s mutually beneficial presence in Brazil with this investment, as he termed, being a further witness to the company’s commitment in the region and its continued economic investment partnership with Brazil as the country grows and prospers economically.

 

May 31, 2010.