- 18 Jul 2024
- ICICI Securities
HINDALCO’S SUBSIDIARY NOVELIS WILL INVEST $90 MILLION TO DOUBLE THE UK’S RECYCLING CAPACITY
HINDALCO - 622 Change: -6.25 (-0.99 %)News: Hindalco’s US based subsidiary i.e. Novelis plans to invest ~$90 million to increase the recycling capacity for used beverage cans (UBC) by 85 kilotons (KT) per year at its Latchford, UK plant. The project is expected to be commissioned by Dec’26.
Views: Recycling aluminium scrap to produce primary metal is an environmentally friendly method, as it consumes only 5% of the energy required to produce the same amount of primary aluminium using traditional method (using bauxite ore, alumina etc.). With the commissioning of the new recycling facility, the company will able to recycle 100% of UBCs and new types of aluminium scrap, thereby improving its operational efficiency as well as reduce its carbon footprint. Moreover, the upcoming commissioning of US’s Guthrie advanced automotive recycling capacity of 240 KT and South Korea UAL’s recycling plant capacity of 100 Kt, will help the company to increase its recycling content from the current 64% to 75% by 2030. We maintain a positive view on the company due to the strong demand for Aluminium driven by its increasing application in the automobile and renewable spaces, strategic capacity expansion at Novelis and Hindalco and controlled leverage on B/S Debt to Equity at ~0.5x.
Impact: Positive