In November 2012, we announced the groundbreaking of the world’s largest aluminum recycling and casting center in Nachterstedt, Germany. This $250 million investment is a core step in our commitment to dramatically increase the recycled content in the aluminum sheet we produce. The construction project reached a milestone yesterday, when the first pillar of the building was erected.
I sat down with Derek Prichett, Vice President of Global Recycling for Novelis, to discuss the magnitude of this project.
Why is Novelis building this huge recycling center?
“There are two main drivers. The first, and most important, is that constructing this center will move us much closer to our company target of 80% recycled content by the year 2020. In fact, this move alone will push us over the 50% mark by 2015. The second is the ability this center will give us to produce more aluminum sheet ingot (which is converted by our plants into rolled aluminum) vs. relying on external supply which we don’t expect will keep up with demand in the future.”
What are the benefits to Novelis customers?
“Our automotive and can customers in particular are very interested in being able to create products with higher recycled content. This will allow them to dramatically reduce the energy and greenhouse gases associated with producing cars, beverage cans and other products like consumer electronics. Our customers are taking a much closer look at their lifecycle and how each piece of the supply chain measures up in terms of sustainability performance.”
What are the benefits to the aluminum industry?
“The efforts to reduce the environmental impact of major automotive manufacturers and beverage companies will help further position aluminum as a material of choice over alternatives like steel and plastic.
Additionally, the new recycling center will allow the European industry to recycle more aluminum scrap locally, instead of exporting it to other regions. This saves energy, reduces logistics costs and provides local economic benefits.”
How is this center different from other Novelis recycling operations?
“One major difference is the size of the facility. We will recycle about 400,000 metric tons of scrap, making this the largest aluminum recycling center in the Novelis system and in the world. Another contrast is in the types of scrap that will be processed. We are expanding far beyond just beverage cans with this facility. We will consume a much broader mix of used aluminum in Nachterstedt including automotive, building and construction, plus other types of industrial scrap like wire and cable. This requires us to invest in new equipment to sort and process the aluminum.”
Why locate this facility in Germany?
“We knew we wanted to build this recycling center at an existing Novelis site. Doing this allows us to take advantage of existing infrastructure like energy, water and other resources. Nachterstedt is centrally located near all scrap sources in eastern and western Europe, meaning we will have a ready and nearby supply of metal to recycle.”
Do you anticipate building additional centers like this in other locations?
“Yes, we will need to build more recycling capacity around the world to meet our 80% recycled content goal. The Nachterstedt project is a key step in our plan to double our recycling capacity to 2.1 M metric tons/year by 2015. To reach our goal of 80% recycled content, we will need to double our recycling capacity again to 4 million tons/year by 2020.”
What is the timing for startup?
“We are making great progress and just completed the first pillar in our construction project yesterday. We celebrated this milestone with the project team and community officials. The project is on target and we have begun hiring for positions in the plant. We expect to start commissioning the equipment in August 2014.”