Novelis to invest $2.5 bn in US in Birla Group's biggest greenfield project

The plan is to build a new highly advanced low-carbon recycling and rolling plant in Bay Minette, Alabama, with initial 600 kilotonnes of finished aluminum goods capacity a year

Novelis, the wholly owned US unit of Aditya Birla Group company Hindalco Industries, said on Wednesday that it would invest $2.5 billion (over Rs 19,000 crore) to build a new recycling and rolling plant in Bay Minette, Alabama, making it the biggest greenfield project overseas by an Indian-owned company.

More than half of the capacity of the new facility, the first fully integrated aluminum mill to be built in the US in 40 years, will be used to serve the growing demand for aluminum beverage can sheets in North America, which is driven by consumer preference for more sustainable packaging, the company said.

“This will be the largest global greenfield expansion project of the Aditya Birla Group and will take the group’s total investment in the US across businesses to over $14 billion,” said Kumar Mangalam Birla, chairman of the Aditya Birla Group and the Novelis board of directors. “We continue to invest in each of the markets Novelis serves – from beverage cans to automotive, aerospace and specialties – and in all geographies,” Birla said.

Several Indian companies, including the Tatas, Birlas, the Adani group and Reliance Industries, as well as public sector oil firms, have invested billions of dollars in acquiring companies, mines, and oil and gas fields, but this is the first time an Indian-owned company is investing such a huge amount of money in a greenfield facility.

In January this year, the Essar Group announced that it had created a joint venture with Progressive Energy of the UK to invest $1.34 billion in a hydrogen manufacturing plant at its Stanlow refinery complex. Essar will own 90 per cent in the company. In 2015, Tata Motors-owned Jaguar Land Rover had announced a $2-billion investment in a new car plant in Slovakia. Hindaco acquired Novelis in 2007 for $6 billion. Later in 2020, Novelis acquired its rival Aleris Corp in the US for $2.8 billion, including its debt.

The new highly advanced facility of Novelis will have an initial capacity of 600 kilotonnes of finished aluminium goods per year. “Novelis has a track record of success in delivering customers the low-carbon, sustainable aluminium solutions they seek, and we will continue that storied history with this investment and others to come,” Birla said.

Steve Fisher, president and CEO of Novelis, said, “We are well-positioned to efficiently expand capacity at this facility in the future – above the 600 kt announced today – to capture ongoing strong demand.”

Novelis’ move is backed by strong North American demand for flat-rolled, low-carbon aluminium from can makers and beverage companies. Aluminum beverage cans, bottles, and cups are the models of sustainable packaging and the circular economy. With an average “can-to-can” lifecycle of just a couple of months, a can that is recycled today can be back on store shelves in as little as 60 days, Novelis said.

The facility is expected to create up to 1,000 high-paying, advanced careers in modern manufacturing in the US.