Novelis and Alcoa have announced they are to split from their joint aluminium can recycling venture with both citing the need for independent control.
The joint venture, which will continue to 31 August this year, claims it purchases more used beverage cans (UBCs) than any other group worldwide.
Novelis said it will exit the partnership, of which it held a 55.8% stake, to ensure it achieves its target of 80% recycled content in their products by 2020.
Alcoa said they were keen to take control as they saw “great opportunities” to expand the venture and be active in the market to drive recycling rates by helping suppliers.
The partnership was set up in 2009 and was planned to run to 2014 but in December last year, Novelis approached Alcoa to negotiate an early pull out.
Increase aluminium in products
Charles Belbin, director of corporate communications at Novelis, told FoodProductionDaily.com at the time the venture made sense but it no longer fitted into their business model.
“About one year ago we set out ambitious targets to raise the recycled content of products we provide for use in beverage cans and raise their scrap input.
“We needed ownership and control and the flexibility it provides to reach our goal of 80% recycled content in our products [by 2020].
“Raising sustainability and reducing our carbon footprint is the cornerstone of our progression and the key driver in our business strategy," he said.
“The joint venture with Alcoa restricted us in doing that, we believe we can achieve our goals better on our own.”
Belbin said in the first year, recycled content was raised from 33% to 39% and it aimed for 50% by 2015.
“50 to 80 per cent is going to be a challenge and it will take a lot of work on our part and our customers but we believe we will get there.”
Evermore Recycling is a aluminium can broker for the procurement of UBCs and acted as a broker, passing on the cans to Novelis or Alcoa.
Novelis will procure all UBCs for its recycling plants in Greensboro, Georgia, Berea, Kentucky, and Oswego, New York.
The firm said it currently buys the equivalent of 40 billion cans a year, worth an estimated $1bn and it expects its global consumption of UBCs to grow to more than 60 billion cans by 2015.
When asked about the fact they would now have to compete with Alcoa, Belbin added: “Nothing really changes in terms of competing for cans, we were already doing that, there are a number of competitors out there, this just adds one more to the mix.”
Alcoa’s Evermore Recycling will be integrated into the firm’s packaging group and will continue to be based in Nashville.
Alcoa in sole control
Kevin Lowery, director of communications at Alcoa, told this publication the firm jumped at the chance to take full control.
“We don’t just aspire to be the biggest, but we do aspire to be the best, in an efficient manner and our experience of doing this in the past will make it easy for the supply base.
“For our company, we are looking forward to driving recycling rates as the sole owner and building on our long history in UBC.”
When asked if the split would cause supply issues, he added: “We are not concerned at all, it is a good position to be in.
“We always like a bit of competition, it pushes you to be better and not stand still.”