Alcoa to Assume Full Control of Recycling Joint Venture
07/17/2012| 02:34am US/Eastern
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--Alcoa says it will assume full control from Novelis of beverage-can-recycling joint venture
--Deal to take control of Evermore Recycling is effective Aug. 31
--Evermore will become part of Alcoa's global-packaging group
--Novelis confirms it will withdraw from venture, says it will establish a new organization for buying and recycling used beverage cans
(Adds details of Novelis exit.)
By Andrea Hotter and Tatyana Shumsky
U.S. aluminum producer Alcoa Inc. (>> Alcoa Inc.) will assume full control from Novelis Inc. for their beverage-can-recycling joint venture, Alcoa said Monday. Novelis separately said it will establish a new organization for buying and recycling used beverage cans.
The deal for Alcoa to take control of Evermore Recycling is effective Aug. 31, and the company will become part of Alcoa's global-packaging group.
Alcoa and Novelis have been partners in the joint venture, which purchases more recycled cans than any other group world-wide, since 2009.
Novelis decided to withdraw from the joint venture, and the two parties negotiated to allow that to happen, Alcoa said.
Industry sources said Novelis paid Alcoa to exit the joint venture early.
Novelis is a subsidiary of Hindalco Industries Ltd. (500440.BY).
Alcoa didn't disclose terms of the deal.
Novelis confirmed its decision to withdraw from the joint venture and said in a statement it will now procure all used beverage cans for its recycling plants in Greensboro, Ga., Berea, Ky., and Oswego, N.Y., directly through a new organization.
"This move is in line with our global strategy to enhance our scrap procurement and recycling assets to support our goal of achieving 80% recycled content in our products by 2020," Derek Prichett, vice president of global recycling for Novelis, said in a statement.
"The ability to independently control our assets and manage our business will provide us with more flexibility to execute our strategic plans. This is the primary driver behind our exit of Evermore," he said.
Evermore Recycling will continue to be based in Nashville, Tenn., and employees of the joint venture are being given opportunities to join the respective companies, Alcoa said.
"We've been a leader and pioneer in recycling since the aluminum can was invented, and we see great opportunities in this new chapter to deepen our rich heritage in recycling," said Andrey Donets, president of Alcoa global packaging.
The aluminum can is easily the most recycled container across the globe and can be recycled into new cans in less than 60 days. Can recycling requires 95% less energy than cans using primary metal, a cycle which can be repeated indefinitely. Approximately 75% of all the aluminum produced since 1888 is still in use today, according to Alcoa.
Write to Andrea Hotter at andrea.hotter@wsj.com and Tatyana Shumsky at tatyana.shumsky@dowjones.com
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