Novelis Investing in China for Auto Aluminum Sheet

Although the announced building of a materials processing plant is not necessarily the sort of thing that we pay attention to, this one stands out because of where it will be and what it will be doing.

Although the announced building of a materials processing plant is not necessarily the sort of thing that we pay attention to, this one stands out because of where it will be and what it will be doing.

Novelis plans to open a $100-million automotive aluminum sheet manufacturing plant in China in late 2014. This will be the first plant of its type in China, according to Novelis.

The plant will have the capacity to produce 120,000 metric tons of sheet per year.

Said Philip Martens, president and CEO of Novelis, “This latest investment in world-class manufacturing assets further solidifies Novelis’ position as the partner-of-choice for global automotive manufacturers seeking to drive fuel efficiency, high performance and innovative design in current and next-generation vehicles. Aluminum is a sustainable choice for automotive customers with its infinite recyclability and low weight that helps reduce vehicle emissions.”

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Phil Martens

What’s interesting about this is that aluminum generally has a price premium vs. steel on an application-to-application basis, and while some people in the West generally think that Chinese products are typically predicated on low costs, clearly this signals the fact that that simply isn’t so.  They’re investing in tech.

The Chinese undoubtedly have every intention of building cars that are world-class. What’s more, as in the U.S. and Europe, there are standards existing or developing in China that call for reduced emissions, which means mass reduction is a key concern in vehicle design and engineering.

Of course, it should be noted that last year Novelis announced that it is investing $200-million in its plant in Oswego, NY, to handle increasing demand for automotive aluminum sheet.

But there’s no underestimating the developing competition for the U.S. domestic OEMs when it comes to developing advanced vehicles.