Novelis Inc., a prominent purveyor of sustainable aluminum solutions, has recently unveiled a new long-term contract in partnership with Coca-Cola Bottlers' Sales & Services Company (CCBSS), the designated contracting agent for The Coca-Cola Company's authorized bottlers in North America.
Under this agreement, Novelis will be responsible for providing aluminum can sheet to The Coca-Cola Company's authorized North American bottlers, ensuring a steady supply for the production of their esteemed range of brands. One of the key sources of supply will be Novelis' upcoming facility in Bay Minette, Alabama, which is currently undergoing construction and is anticipated to commence operations in 2025. Through the CCBSS and Novelis partnership, The Coca-Cola North American bottlers have committed to procuring a confidential volume of aluminum can sheet over a multi-year span.
Steve Fisher, President and CEO of Novelis, expressed his enthusiasm for the new long-term contract, stating that it bolsters the longstanding association between Novelis and the Coca-Cola system while further solidifying Novelis' status as a preeminent provider of aluminum for beverage cans. Fisher also highlighted how this agreement affirms the company's investments in expanding rolling and recycling capacities in North America, securing a sustainable future for aluminum as the preferred material for beverage packaging.
An integral component of the contract is the inclusion of a closed-loop recycling arrangement, which serves as a testament to the shared sustainability commitments of both companies. Through this recycling program, Novelis directly retrieves the manufacturing scrap generated during the can-making process, recycles it, and transforms it into new can sheet that is subsequently utilized in the production of fresh beverage cans. Additionally, Novelis recycles over 80 billion used beverage cans annually, significantly contributing to the production of lower-carbon products. Aluminum recycling is known to be approximately 95% less energy-intensive than primary aluminum production, resulting in a reduction of approximately 95% in carbon emissions.
According to projections by Novelis, there is expected to be a 3% compounded annual growth rate in demand for aluminum beverage can sheet from 2022 to 2031. This surge in demand is primarily driven by consumer preferences for sustainable products, a desire for greater variety in sizes, and the increasing adoption of cans for various beverage types such as water, energy drinks, soda, beer, wine, hard seltzers, and ready-to-drink cocktails.
Dan Coe, Chief Procurement Officer of The Coca-Cola Company, emphasized the evolving role of both The Coca-Cola Company and its bottlers in building a resilient domestic supply chain that supports sustainable long-term growth. Coe acknowledged Novelis as a leader in sustainability and commended their commitment to aiding The Coca-Cola Company in achieving their 2030 World Without Waste Targets.
The aluminum beverage packaging market's robustness is evident as a significant portion of the Bay Minette plant's beverage can capacity has already been contracted.
Novelis' forthcoming low-carbon facility in Bay Minette is poised to be the first fully integrated aluminum manufacturing and recycling plant established in the United States in nearly four decades. The facility, anticipated to generate up to 1,000 new jobs, will boast an initial production capacity of 600,000 tons of finished goods for the North American can and automotive markets. Notably, the plant will operate as a zero-waste facility, utilize recycled water, and be powered by renewable energy sources. Furthermore, Novelis is committed to achieving net carbon neutrality at the Bay Minette facility.
