Rolling out aluminum supply to meet growing demand

Global supply of aluminum automotive sheet has increased by 120,000 metric tons a year with the opening of a US$85 million heat treatment line at the Novelis plant in Nachterstedt, Germany.

Built to serve European and global automotive customers and located adjacent to Novelis’ existing rolling mill and the world’s largest aluminum recycling center, at full production the line will increase Novelis’ European automotive sheet capacity to 350,000 metric tons per year.

It will provide global customers with high-quality automotive sheet, including the Novelis Advanz™ portfolio of alloys used in lightweight vehicle structures and body panels. “Coupled with our recent automotive expansions in North America and Asia, the opening of the new production line in Europe strengthens our industry leadership in the automotive market and uniquely positions Novelis to serve our global customers,” said Steve Fisher, President and CEO of Novelis.

“As automakers increasingly turn to aluminum to achieve better fuel efficiency and reduce CO2 emissions in their vehicles, Novelis remains the supplier of choice and the only manufacturer of automotive aluminum sheet in the three major auto-producing regions of the world,” he said. The technology used in the new Nachterstedt finishing line is identical to that of the lines recently commissioned in the United States and China, according to the company. Automotive Industries (AI) asked Pierre Labat, Vice- President and General Manager, Automotive at Novelis what the outlook is for the aluminum industry.

Labat: We expect a continuous solid annual growth of 3-4% across our products in all our market segments, such as can, automotive and specialty products.

AI: Where do you see the biggest growth opportunities for Novelis?

Labat: We clearly see the biggest growth opportunities for our automotive business where we expect around 25% growth per year globally for aluminum sheet (15% CAGR for Europe) and currently assume that the use of aluminum in automotive will double by 2025. Today, Europe is the largest market for body-in-white aluminum, but demand in other regions is now outpacing Europe.

North America is being driven by the CAFE legislation, while European OEMs in Asia are increasing production and building locally produced models with the same technology as in Europe. Novelis is growing with the market to prepare for global demand, so we are available to all of our customers worldwide. We are committed to being a global business, so that we can supply our clients with the same high quality materials, irrespective of where their assembly plants are located.

AI: What would be the impact on the auto industry?

Labat: Aluminum plays a key role in helping the automotive industry meet its needs as it enables vehicle weight to be dramatically reduced. This is especially the case for aluminum used in vehicle structures, body panels and closures. Indeed, aluminum-based light weighting is the lowest-cost, most sustainable and technically most attractive option available to achieve this goal. As a result, aluminum utilization has grown significantly in recent  years, with an increasing number of car companies opting for either aluminum-intensive design or material hybrid concepts in which aluminum plays a significant role.

Given the unique material properties we see a major growth trend in the use of aluminum across high-volume vehicle platforms in all market segments, ranging from compact to SUV over the next five years.

AI: How is the new US$85 Million investment going to increase your global Automotive Aluminum capacity?

Labat: At full production, this line will increase Novelis’ European automotive sheet capacity to 350,000 metric tons per year and will provide global customers with high-quality automotive sheet, including the Novelis Advanz™ portfolio of alloys used in lightweight vehicle structures and body panels. Since 2011, Novelis has invested more than $550 million globally to triple its automotive sheet capacity to 900,000 metric tons by 2016.

AI: How do you bring the new facility in line with the other three in US and China?

Labat: The new line featuring state-of-the-art technology is an integrated part of the global automotive system. Using the same heat treatment line technology worldwide increases our flexibility as it enables production on several production routes in different regions. This results in better risk management, faster qualification processes and better response to short term demand changes and guarantees an ideal product-fit for optimal quality.

AI: How is the latest expansion going to enhance your automotive closed-loop model?

Labat: Novelis is the leading low-carbon automotive sheet producer and the leader in closed-loop recycling, offering customers a more sustainable solution. In order to reduce the use of energy and raw aluminum drastically, automakers are constantly aiming to increase the amount of recycled content. Together with Jaguar Land Rover in Great Britain and Ford in the US we have installed recycling systems which are specifically collecting the aluminum production waste. This is important because, in this way,

the original qualities can be obtained during melting procedures, without additional expenditure. In line with our recycling centers in Latchford and Nachterstedt, the new automotive sheet line further supports our closed-loop recycling model.

AI: After the success of JLR’s F-Pace what other projects are you working on?

Labat: We are working with multiple customers on new projects in all market segments. Obviously we can’t share any details during development and testing stages, but what we generally see is that aluminum is significantly moving to smaller segments and high volume production across many major automakers. This trend can also be seen at Alfa Romeo, which recently launched a new version of its iconic sports sedan Giulia. It is the first model of the newly developed Alfa Romeo platform, and the basis for a total of eight car models. Novelis as the only aluminum supplier delivers the hood, fender and doors.

AI: What innovations do you have in the pipeline for 2016?

Labat: Novelis sees the future for automotive BiW in a multi-material design. The right material mix is inevitably important for the future to achieve weight, cost and performance targets of the various car manufacturers. Therefore, new and highly efficient joining technologies for different materials, such as steel – aluminum – carbon fiber, must be developed. Our patented Novelis Fusion™ technology is a key to achieve these cost efficient multi material joining solutions. Further new Novelis Fusion™ materials are in development for highly demanding BiW applications.

AI: Why should consumers care about recycled aluminum products?

Labat: As the leading low-carbon aluminum maker, we offer our customers the ability to make products with a smaller environmental footprint and meet automaker’s sustainability goals. In an increasingly energy- and carbon-constrained operating environment, saving energy and reducing emissions through recycled products will be a key source of competitive advantage for our company, for our customers and for our planet.