Novelis Inc. has entered into a joint venture agreement with Kobe Steel, Ltd., a producer of aluminum rolled products in Japan.
The joint venture, to be named Ulsan Aluminum, Ltd., will be formed by Novelis selling Kobe Steel 50 percent of its ownership interest in its Ulsan, South Korea facility for $315 million.
Through the venture, Novelis and Kobe Steel will jointly own and operate the Ulsan facility, with each company remaining responsible for its metal supply and commercial relationships. The joint venture transaction is expected to close in September 2017, subject to customary closing conditions.
By entering into this joint venture, Novelis will better utilize its rolling capacity at Ulsan, which will continue to focus on automotive and specialty sheet in order to meet the increasing demand for lightweight rolled aluminum products across Asia. Partnering with another world-class manufacturing company will allow Novelis to drive operational efficiencies and process enhancements. As a result, Novelis’ Ulsan facility, along with its Yeongju facility in South Korea and its Changzhou facility in China, will be better positioned to deliver innovative, value-added products and services to customers. The transaction will generate cash proceeds to enhance Novelis’ strategic flexibility and reduce its net debt.
Located in the industrial hub of Korea, Novelis’ Ulsan facility employs approximately 600 people and currently focuses on the production of rolled aluminum sheet for a variety of markets in Asia. The plant recently completed a major expansion, adding a new three-stand hot finishing mill as well as a pusher furnace and annealing furnaces.
Published in the June 2017 Edition of American Recycler News