NOVELIS is committed to expanding export markets

Brazilian unit NOVELIS plans to expand its presence in export markets in an attempt to offset the slowdown in domestic demand growth. At the same time, the company decided to cut costs significantly over the next three years. This is due to the fact that the Brazilian domestic market remains weak.

NOVELIS is an American industrial company that is a leading manufacturer of rolled aluminum products. NOVELIS President of South America, Tadeu Nardocci, said that the company has decided to focus on the export markets of South America and Africa, where the company is already exporting aluminum sheets and coils. In line with the company's strategy, the depreciation of the Brazilian currency against the dollar will encourage exports from the country. The increase in exports will help the company to become more competitive. In addition, the Brazilian block will also complement NOVELIS's portfolio in the US, Mexico and some African countries.

The company notes that domestic demand for rolled aluminum has fallen sharply in Brazil over the past few months. During the first months of this year, the consumption of aluminum sheet fell sharply, by almost 15 percent. This was mainly due to a decrease in demand from the automotive and construction industries. In addition, the company faces stiff competition from growing imports of processed aluminum from China. Under these circumstances, increasing export volumes became vital for the company. In addition, the company also decided to strengthen relationships with major importers.

NOVELIS aims to cut costs by 25 percent over the next three years. The recently completed investment project to build the Pindamonhangaba plant is likely to significantly increase production capacity. The company has also doubled its recycling capacity, which could help reduce the cost of production. It should be noted that the company has suspended operations at the Ouro Preto plant due to rising production costs.

Brazil produced 334,000 tonnes of primary aluminum during January-May 2015, down almost 30 percent from production during the corresponding period last year. Production in 2014 fell to less than 1 million tonnes for the first time since 1990. NOVELIS expects Brazilian aluminum production to decline to 750,000 tonnes in 2015.