Hindalco Deepens Global Reach With Novelis, Sales Cross $4 Billion in Q4

As a subsidiary of Hindalco Industries Limited, a leading player in the aluminium and copper industries since 2007, Novelis benefits from being part of the Aditya Birla Group. Novelis is the leading provider of rolled aluminium products worldwide, catering to various industries such as beverage cans, automotive, architecture, and electronics. The acquisition aimed to enhance Hindalco’s global presence, access sheet mills, and scale the value chain in aluminium products.

Production and Partnership

Novelis, renowned for its production of flat-rolled aluminium products and status as the world’s largest aluminium recycler, collaborates with clients across aerospace, automotive, beverage can, and speciality industries. They aim to optimize the advantages of lightweight aluminium across North America, Europe, Asia, and South America.

Geography

Headquartered in Atlanta, Georgia, Novelis operates 33 facilities spread across nine countries and four major continents of North America, South America, Europe and Asia, boasting a workforce of approximately 13,170 employees.

Customer Profile

Novelis serves an impressive clientele, encompassing major names in the aerospace, automotive, beverage packaging, architectural, and consumer electronics sectors, highlighting its prominence and reputation in various industries globally. Some of the major companies involved in their supply line are:

• Beverage Packaging: AB Inbev, CocaCola, Can pack, Crown, Ball etc
• Automotive: Audi, BMW, Daimler, Jaguar, Toyota, Volvo, Nissan, Ford etc
• Aerospace: Airbus, Boeing, Embraer, Bombardier
• Specialities: Samsung, Denso, Ryerson, Mastic

Focus on Recycling

Novelis leads globally in aluminium recycling, operating recycling facilities across four continents. Pioneering closed-loop systems, notably in automotive aluminium, we annually recycle over 82 billion used beverage cans. Leveraging aluminium’s infinite recyclability, our approach involves utilizing 61% recycled inputs, significantly reducing energy consumption by 95% compared to primary aluminium production. This sustainable practice ensures supply chain resilience and aids customers in fulfilling their sustainability objectives.

Deal with Ardagh Metal Packaging USA Corp

Novelis has recently signed a significant deal in January, the deal was with Ardagh Metal Packaging USA Corp., a key player in sustainable aluminium beverage packaging solutions worldwide. In this agreement, Novelis will be supplying aluminium beverage packaging sheets to Ardagh’s metal production facilities across North America. 

This deal coincides with Novelis’ ongoing construction of a groundbreaking rolling and recycling plant in Bay Minette, Ala., which will significantly enhance its capacity to serve the North American market. Novelis anticipates a 4% compounded annual growth in global demand for aluminium beverage packaging sheets from 2023 to 2031, fueled by consumer preference for sustainability and a wider range of canned beverages.

Quarterly Performance

In Q4FY24, net sales declined by 7% compared to the previous year, amounting to $4.1 billion. This was attributed to lower average aluminium prices, although partially driven by increased total shipments, which rose by 2% to 951 kilotonnes, mainly due to increased demand for beverage packaging sheets. Net income attributable to common shareholders saw a 6% increase to $166 million, primarily driven by higher Adjusted EBITDA, which surged by 28% to $514 million, mainly due to favourable benefits from recycling and reduced operating costs.

Conclusion: Novelis, under Hindalco’s ownership, is leading in the industry, their reputation is defined by the calibre of their clientele. Among them are globally renowned automotive, beverage can, architectural, and consumer electronics giants like Coca-Cola, AB Inbev, Ford, Jaguar LandRover, and Samsung. Elite scientists, engineers, and metallurgists collaborate with customers’ needs from development to production, envisioning new possibilities for aluminium in their products and offering swift, flexible solutions for manufacturing.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.