ATLANTA and SEOUL, South Korea, May 9, 2017 /PRNewswire/ -- Novelis Inc., the world leader in aluminum rolling and recycling, announced today that it 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 US $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.
"As a company, we constantly identify business opportunities that allow us to deliver maximum value across our global operations and we continue to see Asia as a strategic market," said Steve Fisher, President and Chief Executive Officer of Novelis. "By entering into this joint venture, we are able to leverage our deep experience with other successful joint ventures to more efficiently serve our customers and increase our strategic flexibility in order to capitalize on potential future market opportunities."
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.
Novelis Inc. is the global leader in aluminum rolled products and the world's largest recycler of aluminum. The company operates in 10 countries, has approximately 12,000 employees and had $10 billion in revenue for its 2016 fiscal year. Novelis supplies premium aluminum sheet and foil products to transportation, packaging, construction, industrial and consumer electronics markets throughout North America, Europe, Asia and South America. Novelis is a subsidiary of Hindalco Industries Limited, an industry leader in aluminum and copper, and metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India. For more information, visit novelis.com and follow us on Facebook at facebook.com/NovelisInc and Twitter at twitter.com/Novelis.
About Kobe Steel
Kobe Steel, Ltd. is a diversified corporation with businesses in the three core areas of materials, machinery and electric power. The materials businesses include steel, welding, aluminum and copper. The machinery businesses consist of industrial machinery, construction machinery and engineering. Electric power supply is the third core business. Kobe Steel has head offices in Kobe and Tokyo, Japan. The Kobe Steel Group, consisting of Kobe Steel and its numerous subsidiaries and affiliates, has over 36,000 employees.
Statements made in this news release which describe Novelis' intentions, expectations, beliefs or predictions may be forward-looking statements within the meaning of securities laws. Forward-looking statements include statements preceded by, followed by, or including the words "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," or similar expressions. Examples of forward looking statements in this news release include Novelis' plan to form a joint venture with Kobe Steel and its predictions about the benefits of the joint venture. Novelis cautions that, by their nature, forward-looking statements involve risk and uncertainty and Novelis' actual results could differ materially from those expressed or implied in such statements. We do not intend, and we disclaim any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise. Other important risk factors included under the caption "Risk Factors" in our upcoming Annual Report on Form 10-K for the fiscal year ended March 31, 2017 are specifically incorporated by reference into this news release.
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SOURCE Novelis Inc.