Novelis' UK unit may see part-sale, not closure

Novelis, part of Aditya Birla Group’s Hindalco Industries, is close to selling at least a part of its Bridgnorth foil plant in Britain, which it had decided to shut down by the end of April. Three companies are conducting due diligence at the site.

Caroline Crolley, regional industrial officer of Unite, a prominent employee union, in an emailed response to Business Standard, said, “We are presently awaiting the outcome of three bids for purchase of approximately a third of the company. This, if successful, would save approximately 100 jobs.”

She did not reveal the names and said the talks were at a very “delicate stage”. E-mails to Novelis and Hindalco went unanswered.

Novelis had hinted at the possibility that part of the packaging operation at Bridgnorth may be sold as a going concern. It had said, “Novelis is in discussions with potential buyers for the printed confectionery packaging business on the site.”

Novelis, in a statement on December 14, 2010, had said the company would cease operations of foil rolling at Bridgnorth and part of the packaging business on the same site, by the end of April 2011. The move had put jobs of 319 employees at the plant at stake. However, with three companies showing interest in buying a part of the foil mill, employees and the union are hopeful that at least 100 jobs can be saved.

The plant is currently operational and is fulfilling its commitments. “Existing customer orders will be fulfilled and clients will be contacted individually regarding the future handling of their business,“ Novelis had said.

The company is currently under a major restructuring drive and is looking at consolidating its operations into other plants in its European system.

The move is aimed at improving competitiveness of its foil and packaging production, as it believes there is considerable over-capacity in the European foil market and the competition from producers in low-cost countries is a major threat.

Apart from the decision to shut Bridgnorth, Novelis, on December 6, has shut an aluminium smelter in Aratu, Brazil, effective December 31.

The company had said the 60,000-tonne smelter was running into losses for the past two years and efforts to improve performance did not yield much results.

Around 300 employees are affected.