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US - Aluminum producer Novelis expanding capacity

Reuters reported that Novelis Inc is expanding its sheet metal capacity to handle an expected increase in worldwide demand from automakers.

Novelis said that it will build a new plant in North America to increase total North American aluminum capacity by 20% and is expanding its plant in Brazil to increase aluminum production for cans.

The company estimates capital expenditure of USD 550 million to USD 600 million in fiscal 2012 and a total of about USD 1.5 billion in the next three years.

Mr Philip Martens CEO of Novelis said that "Over the next 5 years we expect the global automotive sector to grow more than 25%, electronics to grow 10% to 15% and can demand to remain solid up 4% to 5% annually."

The expansion plans came as Novelis reported fiscal Q4 profit of USD 50 million on 22% rise in sales to USD 3 billion. Adjusted EBITDA for the full fiscal year rose 42% to a record USD 1.07 billion. Novelis is a subsidiary of India's HindalCo Industries Limited.

Mr Martens said that aluminum demand, especially in the auto industry, was nearing pre recession levels. The company will spend USD 200 million to build the new North American plant. The plant will boost total annual North American aluminum capacity by 200,000 tonnes to 1.36 million tonnes.

A Novelis spokeswoman said that the facility is expected to come online in 24 to 30 months. The site of the plant has not yet been determined. Novelis is spending USD 300 million to expand its Pinda mill in Brazil to produce an extra 220,000 tonnes of sheet aluminum for cans. That will bring total production in Brazil to 650,000 tonnes.

Source: Reuters

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