Yesterday marked the end of the 5th International Aluminum Congress, a three-day event I chaired on behalf of the Brazilian Aluminum Association (ABAL). This year we focused on the growing demand in Brazil – and what will be needed to meet it.
My home country of Brazil is one of the fastest growing economies in the world. With well-developed agricultural, mining, manufacturing and service sectors, in the past few years, the country has seen our economy take off. Just this week, analysts re-estimated the GDP (Gross Domestic Product) to 3.21%. At this rate, Brazil is outpacing much of the world. In fact, Brazil recently surpassed the UK to become the sixth largest economy. And, we’re not slowing down. With the country set to host the FIFA World Cup in 2014 and the Summer Olympic Games just two years later, the economy continues to boom as major investments are adding new hotels, stadiums and public transportation systems throughout the country.
This development is not only good for the people of Brazil, but for the aluminum industry as well. Historically, there has been a very close relationship between domestic aluminum consumption and GDP. In fact, since 1965, the domestic aluminum consumption has been higher than GDP, on average around 1.7 times higher. Brazil’s domestic aluminum consumption increased 1.2% in the first quarter this year compared to the same time last year and we expect the growth to continue to rise by an average of 8.9% per year through 2025. If the trend continues, this means that Brazil will soon be unable to produce enough aluminum to account for the demand in the country.
This demand challenge creates an even greater focus on the need to recycle, despite Brazil’s status as the worldwide leader in beverage can recycling with a rate of 97.6%. Aluminum beverage containers play a big role in Brazil’s economy given that the collection activity is an income generator for many people. Since the recycling activities in Brazil are well consolidated through an organized collection system integrated with remelt facilities, the aluminum can provides an excellent benchmark for developing the recycling chain further. In the next few years, we hope to meet a 100% aluminum can recycling rate, but we will also need to increase the recycling of other materials – such as semi-rigid containers, flexible packaging and scrap from cars – to account for the growing demand.
Brazil has long been referred to as ‘the country of the future’ – and it seems that aluminum will help this future take shape.
Editor’s Note: To keep up with this growth, Novelis has announced investments of $300 million in its rolling operations, $50 million in a coating line and $32 million in its recycling operations at the Pindamonhangaba (Pinda) plant to expand capacity in the region. The Pinda plant produces aluminum sheet for beverage cans.