HAMBURG (Reuters) - Novelis, a U.S.-based manufacturer of rolled aluminium products, said it had opened a $258 million recycling plant in Germany to process aluminium scrap obtained throughout Europe.
The plant, in Nachterstedt in east Germany, will produce 400,000 tonnes of aluminium annually using scrap including drinks cans, cables, wires and industrial waste, Novelis President and Chief Executive Phil Martens told Reuters on Wednesday.
Good availability of scrap in Europe is a major reason for locating the plant in Germany, he said. Full production should be reached in January 2015.
"We will be sourcing scrap from just about everywhere in Europe," he said, including Germany, Scandinavia, Spain, France, Italy and Eastern Europe.
About 300,000 tonnes of the metal produced will go to the giant Alunorf rolling mill in Germany, which produces about 1.5 million tonnes of rolled aluminium annually and is jointly owned by Novelis and Norwegian group Norsk Hydro (NHY.OL).
A further 100,000 tonnes will go to a Novelis plant in Switzerland.
The output will replace imports of aluminium metal and purchases from traders and other third parties after closures of European aluminium smelters have made the metal increasingly difficult to source, Martens said.
He said the Nachterstedt plant would contribute Novelis' strategy of increasing the percentage of recycled aluminium used in making its products to 50 percent of output by the middle of the decade and 80 percent by 2020, from the current level of about 46 percent.
He described European aluminium demand as "stable" but said the outlook would depend on whether the German economy continues to grow.
Novelis is a unit of India's Hindalco Industries (HALC.NS).
Reporting by Michael Hogan; editing by Jane Baird