Novelis to eclipse Alcoa on metal cans

The president of Novelis Inc.,the U.S.-based aluminum unit of India's Hindalco Industries, says his company will become the largest North American maker of metal for beverage cans this year as Alcoa Inc. curtails output.

Novelis will increase its North American shipments of aluminum for cans by about 3 percent to an estimated 1.75 billion pounds of sheet, Novelis President Philip Martens said last week. That would be about 45 percent of the North American market of 3.9 billion pounds, he said.

"We've gained some share in flat rolled and can sheet," Martens said. "In the U.S., we will be the dominant can-sheet provider."Alcoa, which has a plant in Auburn and is the largest U.S. aluminum producer, said in April it curtailed can-sheet volumes. That reduced shipments of flat-rolled products by 75,000 tons in the first quarter.

Alcoa Chief Executive Officer Klaus Kleinfeld said at that time the company decided to let a money-losing 10-year contract expire to focus on more profitable business. He didn't identify the customer.

Alcoa "took a different position within the U.S. market, and that has opened up opportunities for others, including ourselves," Martens said.

Alcoa's can-sheet volumes are expected to decline significantly in North America this year due to its change in pricing strategy, the company had said in its 2009 annual report filed in February.

Kevin Lowery, a spokesman for New York-based Alcoa, declined to comment on Alcoa's share of the can-sheet market. He referred back to Kleinfeld's comments when asked about the statements by Martens.

"We are focused on the long-term profitability of the business," Lowery said in an e-mail.

Martens said Novelis' contracts for beverage cans are profitable. He didn't supply details.

"We certainly don't have the perspective that Alcoa has," Martens said. "These are profit-contributing parts of our business."Volumes at Alcoa's can-sheet business may be cut by more than 25 percent after the company took a harder line on price increases, Charles Bradford, a partner at New York-based consulting firm Affiliated Research Group, said last week.

"Alcoa may have thought no one was big enough to absorb that business," Bradford said.

Hindalco, India's largest aluminum maker, acquired Novelis in 2007, two years after it was spun off by Montreal-based Alcan Inc.

Novelis, based in Atlanta, had $8.67 billion in sales in the fiscal year ending March 31, 54 percent of which came from sales of aluminum used for beverage cans.