Novelis Inc, the US subsidiary of Hindalco Industries Ltd, plans to invest $205 million (around Rs 1,270 crore) to expand its aluminium automotive grade production capacity in the US and Germany.

The company will build new finishing lines at its plants in Oswego, New York, and Nachterstedt, Germany, dedicated to the production of aluminium automotive sheets.

The two new lines will each have a capacity of 1,20,000 tonnes a year.

The latest expansions come amid escalating global demand from automakers for aluminium sheets, which the company expects to grow by more than 30 per cent a year through the end of the decade, Novelis said in a press release.

When the new lines are commissioned in late 2015, Novelis' global automotive sheet capacity would be about 900,000 tonnes a year, a three-fold increase from a year ago.

Novelis is one of the world's leading providers of aluminium automotive sheet, which auto manufacturers are turning to for making structural components and exterior body panels. The company’s products are used in over 180 different vehicle models produced by leading automakers around the globe.

Preferred choice Aluminium is becoming the sustainable choice for the latest generation of vehicles because of its low weight and re-cyclability enabling reduced life cycle emissions.

Phil Martens, Novelis President and CEO, said with the addition of the two new lines, the company has invested nearly $550 million to expand its global automotive capacity in the last two years alone.

The company recently commissioned two new finishing lines at its New York plant. In addition, a new plant is under construction in Changzhou, China, which is expected to commence production in mid-2014.

Novelis also recently certified automotive production in Germany, which complements its existing automotive facilities in Kingston, Ontario, Canada; Sierre, Switzerland and Nachterstedt, Germany.

Shares of Hindalco were up 1.2 per cent on the BSE at Rs 117.80.

> suresh.i@thehindu.co.in

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