Novelis completes joint venture with Kobe Steel

Novelis, the world leader in aluminum rolling and recycling, announced Friday, September 29, that it completed the transaction for its joint venture with Kobe Steel, Ltd., a producer of aluminum rolled products in Japan. The joint venture, Ulsan Aluminum, Ltd., was formed by Novelis selling Kobe Steel its ownership interest in its Ulsan, South Korea facility for US $315 million. Novelis and Kobe Steel together own the Ulsan Aluminum, Ltd. facility, with each company remaining responsible for its own metal supply and commercial relationships.

The Ulsan Aluminum plant is strategically located in the industrial hub of Ulsan, South Korea to support the increasing demand for high-strength and lightweight aluminum for automotive and specialty products including electronics and building materials in Asia. The plant recently completed a major expansion, adding a new three-stand hot finishing mill, as well as a pusher furnace and annealing furnaces. All 600 employees at the plant are now employed by Ulsan Aluminum. In addition, the transaction will generate cash proceeds to enhance Novelis' strategic flexibility and reduce its net debt.

“This strategic partnership further supports Novelis’ continued commitment to growth in the Asian automotive industry and creates new capabilities to meet the increasing demand for aluminum sheet,” said Sachin Satpute, President of Novelis Asia. “Through an increase in operational efficiencies and process enhancements, this partnership will provide our global customers greater access to the numerous benefits of aluminum.”

Aluminum is a growing material of choice for the automotive industry, offering a safe, sustainable and cost-effective way to lightweight vehicles that result in better performance and agility, increase fuel economy and reduce carbon emissions. As automotive sales continue to increase in Asia, Novelis’ interest in Ulsan Aluminum will remain a key part of its current Asian portfolio, which also includes the Yeongju facility in South Korea and the Changzhou facility in China.

“Ulsan Aluminum is committed to providing first-class rolled aluminum products and services to benefit our customers in the region. We will continue to operate with a high-quality and safety-first mentality, and will support the local market with innovative aluminum products,” said Jerry Quick, President and CEO of Ulsan Aluminum, Ltd.