Shanghai World Financial Center: Location of Novelis China office
Aluminum demand in China is soaring, with double digit growth rates in the last ten years and very strong demand projections in the current decade. Last week I witnessed this growth when I traveled to Jiangsu province to announce the decision to build Novelis’ first manufacturing plant in China to serve the large and booming automotive market as Novelis enters China. The location of the plant, in Changzhou City, is just northwest of our office in Shanghai and has access to a deep water port, rail lines and state-of-the-art highways, making the logistics very favorable within China as well as for international exports.
China is a natural fit for Novelis as the demand for cars, beverage cans and specialties such as electronics here and throughout Asia will more than double by 2020, creating a perfect basis for Novelis to expand our global leadership position in these core markets. For instance, China is projected to be the largest beer market in the world, which influences aluminum beverage can production. And, whereas overall Asian demand for flat rolled aluminum is expected to grow at a rate of 6-8%, we expect demand in China to show a growth rate of 8-10%.
In talking with many of our automotive customers in China, there is a huge opportunity to provide aluminum sheet for global automotive manufacturers seeking to produce fuel efficient, high performance and innovative next-generation vehicles. Aluminum is a sustainable choice for our customers with its infinite recyclability and low weight that helps reduce vehicle emissions. In a post published today about the Novelis China investment, Automotive Design & Production says, “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.”
And, mid and long-term there is potential to grow further to serve other markets like beverage cans and electronics, and to become the leader in aluminum recycling in China. Hence, what may seem like a small first step in Changzhou now, is in fact a major move for Novelis to secure and expand its global leadership position in the long-term.
Take a look at the presentation that we shared with government officials and media at the signing ceremony in the Changzhou Hi-Tech district: Novelis Presentation at China Signing Ceremony
Erwin Mayr signs documents with government officials in China at an official signing
Phil Martens, Novelis President and CEO speaks at China signing ceremony