BS reported that Atlanta based Novelis Inc part of the Aditya Birla group’s Hindalco Industries, Asia’s largest integrated aluminum and copper producer has raised debt of USD 225 million to complete the purchase of its Korean subsidiary. It will pay USD 125 million cash to seal the deal.

The stake purchase of 31.2% in Novelis Korea will raise Novelis Inc’s holding to nearly 100%. Novelis is the world’s largest recycler of aluminum cans used by beverage companies. The Korean subsidiary will service the Asian and North African markets.

Mr Phil Martens president and CEO of Novelis said that "Our decision to buy out the minority shareholders in Novelis Korea represents another key step in Novelis' strategy to prepare for future growth in Asia."

Through Novelis, Hindalco is trying to capture the upstream market of value added aluminum products such as beverage cans. Novelis also makes aluminum for cars. Novelis plans to invest between USD 500 million to USD 600 million in its global expansion plans in the current year.

Most of this capital expenditure is happening in its Brazilian and Asian rolling mill expansion strategic automotive capacity increase in North America and recycling initiatives across its plants. In its Pinda plant in Brazil, Novelis is spending USD 300 million over the next 2 years to expand the aluminum rolling capacity by over 50%.

In Asia, apart from the 31.2% stake to make Novelis Korea a complete Novelis subsidiary, the company is also spending USD 400 million in its aluminum rolling and recycling plants. The total capacity to make aluminum sheets in Korea will increase to 1,000 kilo tonnes per year in FY2013 raising Novelis' aluminum sheet capacity in Asia by more than 50%.

Novelis' can body plant of Rogerstone, UK is being shifted to India. The machinery has been transported to Hindalco's Hirakud plant and it is scheduled to start in early 2012.

(Sourced from Business Standard)