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Headquarters of Novelis on the shores of Lake Ontario in Oswego.

Despite Pandemic, Novelis in Growth Mode

Global leader in aluminum production acquires Aleris Corp.

By Lou Sorendo

Not even a global pandemic can stop Novelis Inc., the world leader in aluminum rolling and recycling, from continuing to grow.

Novelis is the leading producer of flat-rolled aluminum products and the world’s largest recycler of aluminum. It primarily serves the automotive, beverage can and specialty markets.

Novelis Inc. recently acquired Aleris Corporation, a manufacturer and global supplier of rolled aluminum products, for $2.8 billion.

Aleris serves a variety of industries, including aerospace, automotive, defense, building and construction, transportation, packaging, and consumer goods.

Its revenue in 2019 was $3.4 billion.

The acquisition occurred despite manufacturing activity in New York falling to its lowest level on record. Factories across the state have been forced to shut down because of the coronavirus pandemic.

Nonetheless, Novelis is poised to more efficiently serve the growing Asia market by integrating complementary assets in the region including recycling, casting, rolling and finishing capabilities, company officials say. The company will also add aerospace to its portfolio.

Aleris provides entry into the aerospace market, an operation in China that can be fully optimized, and a profitable building and construction business, said Leila Giancone, communications lead at Novelis Inc. in Oswego.

“The cultures and commitment to safety are very much aligned, paving the way for a successful integration of businesses and employees and long-term growth for Novelis.”

“We believe strongly that aluminum is a material in demand across a number of industries, many of which we operate in today such as automotive, beverage can, aerospace and others,” she said. “This gives us the confidence to make this acquisition.”

Giancone said Novelis purchased a company that is showing positive financials and increasingly efficient operations while maintaining a focus on safety.

“We are confident in our integration process, some of which will be done virtually at first to accommodate this period of temporary disruption due to COVID-19,” she noted.

Novelis is now better positioned to meet customer demand for aluminum by expanding its innovative product portfolio, creating a more diverse workforce, and deepening its commitment to safety, sustainability, quality and partnership, she added.

“While combining Aleris with Novelis expands our footprint and our ability to deliver rapid, adaptive and sustainable solutions, it will not directly alter production and operations in the Oswego facility,” Giancone said. “Oswego Works will continue to serve its valued customers in the automotive, beverage can and specialty markets.”

As a result of the transaction, Novelis has acquired Aleris’ 13 plants across North America, Europe and Asia. To satisfy regulatory conditions, the company was required to divest Aleris’ plants in Lewisport, Kentucky, and Duffel, Belgium.

Only Exelon Generation has more workers than Novelis in Oswego County among private employers. Novelis employs 1,150 workers, ranking it first in Oswego County among manufacturers.

“As we navigate this unprecedented and evolving situation, Novelis remains committed to making decisions that are in the best interest of our people, customers and communities.”

Leila Giancone, communications lead at Novelis Inc. in Oswego.

Slowed by COVID-19

While COVID-19 did not stop the acquisition of Aleris, it did alter production at Novelis Oswego Works on a temporary basis.

In late March, Novelis partially closed its Oswego Works’ facility after some of its largest customers, including automakers, announced they would shut down because of the coronavirus pandemic.

Giancone said the company is experiencing disruption to its aluminum production and supply chain in Oswego and globally as a result of challenges presented by COVID-19.

She noted some of its customers also temporarily shut down their own manufacturing operations due to the pandemic.

In late April, Ford Motor Co. began recalling a skeleton crew of workers to start preparing its factories for reopening.

Its plants, along with all Detroit Three assembly lines, have been shut down since late March to protect workers from exposure to COVID-19.

Novelis is a major supplier to the auto industry and Ford Motor Co. is its second-largest overall customer, generating about 10 percent of its annual revenue, according to its 2019 annual report.

Oswego Works makes aluminum used in the body panels of Ford’s F-Series trucks.

In addition to Ford, the plant provides aluminum to GM, Fiat Chrysler, Honda, BMW and Mercedes.

“As we navigate this unprecedented and evolving situation, Novelis remains committed to making decisions that are in the best interest of our people, customers and communities,” Giancone said. “We continue to monitor the situation and will plan to safely ramp up to full production when the customer demand is there. We do not have an exact date at this time.”

Reports indicate that less than 300 workers are active at Oswego Works.

While Novelis has temporarily ramped down aluminum supply for the automotive market, the Scriba-based plant continues to produce aluminum for the beverage can and specialty markets, Giancone said.

“We have made adaptive changes to our operations schedules to ensure limited onsite staff to support our safety measures such as social distancing. We do not currently have any Oswego employees on layoff,” she noted.