Foil packaging plants did not fit with growth strategy - Novelis

By Joe Whitworth

- Last updated on GMT

Novelis sell 3 foil packaging plants to Eurofoil

Related tags Recyclable materials Aluminium

Novelis has completed the sale of three aluminium foil packaging plants citing a lack of growth opportunities being the behind the move.

The Georgia-based firm sold the European sites to Eurofoil, a unit of American Industrial Acquisition Corporation (AIAC). 

The company said it would enable a focus on their other businesses, including beverage cans, and research into an aluminium beverage can made of 100% recyclable material.

The transaction includes foil rolling operations in Rugles, France; Dudelange, Luxembourg; and Berlin, Germany.

Novelis still have an aluminium foil presence in Europe and North and South America.

Growth strategy

Charles Belbin, director of corporate communications at Novelis, told the plants no longer fitted in with its growth strategy.

They didn’t fit with our growth strategy and focus on premium production areas such as beverage cans, automotive and electrical which are high-end speciality markets.

“Aluminium foil was good but it didn’t have the growth opportunities.

“It is not a premium product, but it will be good for others who have business and growth plans in that area, so we are pleased to sell them to Eurofoil​.”

Belbin said beverage is a global hub for R&D and a key growth market for the firm.

Beverage cans are highly engineered, the aluminium sheet requirement is challenging to many and there are few aluminium producers in the world with the high end technology.

“Geographically, aluminium cans are growing in emerging markets while North America is a more mature business​.

“The beverage can is virtually the perfect package, it has many advantages as a package and there is growth potential in Brazil and Asia as countries grow economically and there is a greater demand for consumables​,” he said. 

We predict the compound annual growth rate (CAGR) will be around four to five per cent per year for the worldwide aluminium beverage can market for the next four to five years.”

Aluminium can innovation

The firm also revealed they were working on an aluminium beverage can that was made of 100% recyclable material.

There is a lot of opportunity for technology in beverage, we are currently prototyping an aluminium can from 100% recyclable material but there are avenues still to be explored.

“Our intention is to bring it to market but there is work to do with our partners and customers, who are the can makers.

“[Aluminium] is continuing to displace steel as the preferred package in East Europe and Asia​.”

Willem Loue, managing director of Eurofoil, said: "These operations have a strong asset base, a skilled workforce and lead in the markets they serve.

“They enhance and fit well with AIAC's growing portfolio of world class manufacturing operations.  

“While we are proud of the plants' heritage within the major aluminium corporations, we now look forward to our future within the AIAC group of companies. 

“We are now well positioned to optimize our presence in the European foil and packaging markets​." 

Related topics Processing & packaging

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