Novelis to raise capacity by 20%

Mumbai: Hindalco Industries, an Aditya Birla Group company, on Friday said its Atlanta-based unit, Novelis, a leading global producer of aluminum products, will increase its production capacity by 20% by 2014, up from the current capacity of three million tonnes.

Hindalco’s managing director Debu Bhattacharya said, “Novelis will increase its capacity through brownfield expansions of plants in emerging markets, such as Brazil.”

Novelis will invest about $300 million in one of its Brazilian factories to meet the growing demand for its products in South America. According to Paresh Jain, an analyst with Angel Broking, “While the capacity at its Pinda operations in Brazil is being increased by 2.2 lakh tonnes, the balance will be through debottlenecking. Out of the $300 million capex planned for Pinda expansion, 25% and 40% is expected to be incurred in FY2011 and FY2012, respectively.”

The capex for debottlenecking would be less than $80mn and will generate higher returns for the company,” Jain said in his report. Novelis operates four recycling and manufacturing plants and nine hydroelectric facilities throughout Brazil.

Meanwhile, Bhattacharya also revealed that the company expects to restart operations at its copper mine in Mount Gordon, Australia, by December, 2010.