REUTERS - Aluminum products maker Novelis said on Monday it has pulled out of a joint venture with Alcoa Inc to recycle beverage cans and will set up its own recycling business.
Alcoa said it would assume full control of the Evermore joint venture effective August 31.
The two companies have been partners since 2009 in the joint venture, which purchases more recycled cans than any other group in the world.
Neither Alcoa nor Novelis revealed financial details of Novelis' withdrawal from the venture, which was originally planned to last until 2014. Novelis owned 55.8 percent of Evermore.
Atlanta-based Novelis, a unit of India's HindalCo Industries Ltd, said it would establish a new organization for the procurement of used beverage cans (UBCs) in North America.
Novelis will procure UBCs for its recycling plants in Greensboro, Georgia, Berea, Kentucky, and Oswego, New York, through the new organization, it said.
"This move is in line with our global strategy to enhance our scrap procurement and recycling assets to support our goal of achieving 80 percent recycled content in our products by 2020," said Derek Prichett, Novelis' vice president for Global Recycling.
Novelis said it currently buys the equivalent of 40 billion cans a year, worth an estimated $1 billion. It expects its global consumption of UBCs to grow to more than 60 billion cans by 2015.
Evermore will become a part of Alcoa`s Global Packaging group and will remain in Nashville, Tennessee.
Reporting By Steve James; editing by John Wallace