aluminum rolling outlook · 2018-01-10 · requires proportionate increase in casting / recycling...
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Platts Aluminum Symposium
Presented by
Nick Madden
Senior Vice President and Chief Procurement Officer
January 2012
Aluminum Rolling Outlook
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Novelis is a Global Industry Leader
The world’s largest
producer of rolled
aluminum products
The world’s leading
recycler of used aluminum
beverage cans
The world’s largest
buyer of aluminum
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Changing Industry Structure
► Downstream decoupling from
metal supply
► Structural global demand growth
6%+
► Customers going global
► FRP almost fully de-integrated
► Third party slab market developing
► Slab casting capacity needs to
grow
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Changing Industry Structure
► For Novelis...
► Focused business - portfolio of
premium products
► Maturing pass-through business
model
► Sustainability commitment
► Greater flexibility in metal strategy
/ increased recycling
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► Growth 2010–2015 driven by global megatrends
► “Business as Usual” standard growth 2015 – 2020
► Adds 11 Million tonnes to global demand 2010 - 2020
Global rolled products demand is growing
0
0.02
0.04
0.06
0.08
0.1
0.12
0
5
10
15
20
25
30
35
FRP Demand
% CAGR
Future Past
Source: CRU, Novelis
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Specialties Beverage Can Automotive
Source: Novelis and CRU Estimates
Long Term Global Trends in Aluminum Demand
Long-term
annual growth
rate
(CY10-15)
>25%
6% 4-5%
Strong Long Term Outlook
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2015: Asia ~ 50% of global aluminum rolled products market
Source: CRU March 2011
Size of FRP Market (kt in 2015)
Average Annual
Growth Rate (CAGR % 1995-2015)
12%
10%
8%
6%
4%
2%
0%
-2%
0 2,000 4,000 6,000 8,000 10,000 12,000
Middle East
& Africa
Latin
America
Europe
North
America
Asia Pacific
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Global Trends Point to Increasing Aluminum Demand
Material Preference
Increasing substitution
to aluminum from other
materials in emerging
markets
Sustainability
Growing awareness
of environmentalism
and demand for
recycled products
Economic Development
Increasing urbanization,
modernization of
infrastructure, and
global wealth
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By 2020
► Will have major industry impact: suppliers, customers
► Reduces carbon intensity of our customers’ products
► Fundamental evolution of business model
We aim to have 80% of our products
produced made from recycled materials
Launched global Sustainability Commitment
As largest global purchaser, Novelis has a leadership role
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Primary Products – Excluding China
47%
18%
20%
15%
Primary Smelter Product Mix
Ingot Slab
Billet Foundry / Other
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
Sheet Ingot Capacity (kt)
Asia Africa/ME
Russia South America
Europe North America
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Novelis Investing in Supply Chain
Aluminum plant expansion to create
100 new jobs
Novelis Investing $400 Million to
Grow its Operations in Asia
Novelis Plans $15.8 million Italian
Expansion
Novelis Poised for Growth Amidst
Slow Economy
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► Total capacity increase of ~1 mio tonnes through FY16
(CY2015) to 4 mio tonnes
► Requires proportionate increase in casting / recycling
capacity
Novelis Growth Roadmap
Automotive Capacity
Increase: ~200kt
Debottlenecking: ~60kt
Debottlenecking: ~90kt
Portfolio optimization
Multiple recycling projects
Asian Rolling Expansion:
~350kt to 1 mio tonnes
Debottlenecking: ~70kt
UBC Recycling
Pinda Expansion: ~220kt
Debottlenecking: ~30kt
UBC Recycling
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► Positive medium term outlook in FRP is unchanged
► 2012 will be slower than previously expected
► Novelis will invest ~$1.5bn and increase FRP capacity
by 1 mio tonnes to meet requirements of our customers
► We will meet the growth with recycle based sheet ingot to:
► Secure economic supplies
► Meet our Sustainability goals.
Building a Lighter and Brighter Future
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Thank You