Novelis shifts focus to the more lucrative automotive industry

Novelis Inc. which is the U.S. arm of Hindalco, one of India’s largest aluminium makers said that they are slowly shifting their focus towards catering to automakers and as a result they have cut 3,000 and hired 4,000 workers over the past four years.

The transition has caused the displacement of nearly 35 percent of the company’s workforce as revealed by the Chief Executive Officer, Phil Martens on Tuesday. He also said that the new workers are currently working out of the greenfield sites. There are also plans of expansion to support the growth seen in the automotive industry and the consequent demand in the aluminium recycling business, he said during an interview.

Since many automakers are switching to aluminium to reduce weight and increase fuel efficiency, Novelis expects a rising demand in the aluminium components. Novelis too is more inclined to go into the automotive industry as, “Automotive is more profitable” than making cars, according to Phil Martens.

Novelis had predicted in August that their automotive aluminium shipments are likely to amount to 25 percent of their total sales by 2020 from the 9 percent it contributes now.

On Tuesday, this Atlanta-based company said that they have had a record amount of shipments in the automotive aluminium sheets in the Q2 2014 that has pushed their net income by 65 percent to $38 million YOY.