Novelis has signed an agreement with the Changzhou National Hi-Tech District to build the company’s first automotive sheet manufacturing facility in China.  The agreement, which includes land use rights to more than 160 acres, was signed in Changzhou City in the Jiangsu Province of China.

Novelis is the world’s leading producer of rolled aluminium for the global automotive market and the leading provider of aluminium sheet to the rapidly expanding Chinese automobile industry. The wholly owned, US$100m plant will have a capacity of 120,000 tonnes per year and is expected to be commissioned for operation in late 2014.

“The agreement we signed today marks another important milestone in the execution of Novelis’ global strategy,” said Philip Martens, president and chief executive officer of Novelis. “Aluminium is a sustainable choice for automotive customers with its infinite recyclability and low weight that helps reduce vehicle emissions.”

Novelis expects demand for aluminium in the global automotive sector to grow at a compound annual rate of 25% over the next five years as auto manufacturers look for ways to make their vehicles more fuel efficient. The move into China will position Novelis as the only aluminium sheet supplier capable of serving automotive customers in all major markets of the world. Novelis is the leader in automotive sheet supply in Europe where light-weight aluminium has become a popular alternative to steel for vehicle makers. And, as previously announced, to meet growing demand in North America the company is expanding its footprint there with a $200m project to increase automotive sheet capacity by 200,000 tons per year.

Located in the heart of the Changzhou National Hi-Tech District, the new site is close to vital rail lines, the Changzhou deep water port on the Yangtze River and other world-class business and commercial infrastructure.  The company plans to ship rolled aluminium coils manufactured at its South Korean operations to the new facility in Changzhou for heat treatment and finishing before delivery to automotive customers within China as well as to export markets.  Current Novelis auto sheet customers include Audi, BMW, Chrysler, Ferrari, Ford, GM, Hyundai, Jaguar, Land Rover, Mercedes-Benz, Porsche, and Volvo.

“Our intention is to grow our leadership position in the Chinese marketplace,” said Novelis strategist Erwin Mayr.  “Within Asia, China will have the highest demand growth for flat-rolled aluminium products.  In addition to automotive, we expect Asian demand for aluminium used in beverage cans and consumer electronics to more than double by 2020. This site will allow us to address future expansion opportunities in such premium market sectors.”