Hindalco arm Novelis forms JV with Japan's Kobe Steel in South Korea

The aluminium rolling & recycling company Novelis Inc, a subsidiary of Aditya Birla Group’s Hindalco Industries Ltd, has sold its 50 percent in its Ulsan (South Korea) facility to Japan’s Kobe Steel Ltd for $ 315 million. With this, two companies will form a joint venture, to be named Ulsan Aluminum Ltd.

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 utilise 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 aluminium 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.