Aluminum Rolling Outlook Platts Aluminum Symposium Presented by - - PowerPoint PPT Presentation
Aluminum Rolling Outlook Platts Aluminum Symposium Presented by Nick Madden Senior Vice President and Chief Procurement Officer January 2012 Novelis is a Global Industry Leader The world s leading The worlds largest The world s
Platts Aluminum Symposium Presented by Nick Madden Senior Vice President and Chief Procurement Officer January 2012
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Novelis is a Global Industry Leader The world’s largest producer of rolled aluminum products The world’s leading recycler of used aluminum beverage cans The world’s largest buyer of aluminum
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Changing Industry Structure
► Downstream decoupling from
metal supply
► Structural global demand growth
6%+
► Customers going global ► FRP almost fully de-integrated ► Third party slab market developing ► Slab casting capacity needs to
grow
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Changing Industry Structure
► For Novelis...
► Focused business - portfolio of
premium products
► Maturing pass-through business
model
► Sustainability commitment ► Greater flexibility in metal strategy
/ increased recycling
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► Growth 2010–2015 driven by global megatrends ► “Business as Usual” standard growth 2015 – 2020 ► Adds 11 Million tonnes to global demand 2010 - 2020
Global rolled products demand is growing 0.02 0.04 0.06 0.08 0.1 0.12 5 10 15 20 25 30 35
FRP Demand % CAGR
Future Past
Source: CRU, Novelis
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Specialties Beverage Can Automotive
Source: Novelis and CRU Estimates
Long Term Global Trends in Aluminum Demand
Long-term annual growth rate (CY10-15)
>25% 6% 4-5% Strong Long Term Outlook
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2015: Asia ~ 50% of global aluminum rolled products market
Source: CRU March 2011
Size of FRP Market
(kt in 2015)
Average Annual Growth Rate
(CAGR % 1995-2015)
12% 10% 8% 6% 4% 2% 0%
2,000 4,000 6,000 8,000 10,000 12,000
Middle East & Africa Latin America Europe North America Asia Pacific
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Global Trends Point to Increasing Aluminum Demand Material Preference Increasing substitution to aluminum from other materials in emerging markets Sustainability Growing awareness
and demand for recycled products Economic Development Increasing urbanization, modernization of infrastructure, and global wealth
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► Will have major industry impact: suppliers, customers ► Reduces carbon intensity of our customers’ products ► Fundamental evolution of business model
We aim to have 80% of our products produced made from recycled materials
Launched global Sustainability Commitment
As largest global purchaser, Novelis has a leadership role
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Primary Products – Excluding China
47% 18% 20% 15%
Primary Smelter Product Mix Ingot Slab Billet Foundry / Other
500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Sheet Ingot Capacity (kt) Asia Africa/ME Russia South America Europe North America
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Novelis Investing in Supply Chain
Aluminum plant expansion to create 100 new jobs Novelis Investing $400 Million to Grow its Operations in Asia Novelis Plans $15.8 million Italian Expansion Novelis Poised for Growth Amidst Slow Economy
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► Total capacity increase of ~1 mio tonnes through FY16
(CY2015) to 4 mio tonnes
► Requires proportionate increase in casting / recycling
capacity
Novelis Growth Roadmap
Increase: ~200kt
~350kt to 1 mio tonnes
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► Positive medium term outlook in FRP is unchanged ► 2012 will be slower than previously expected ► Novelis will invest ~$1.5bn and increase FRP capacity
by 1 mio tonnes to meet requirements of our customers
► We will meet the growth with recycle based sheet ingot to: ► Secure economic supplies ► Meet our Sustainability goals.
Building a Lighter and Brighter Future