Ball, Ardagh, Coca-Cola aluminum supplier Novelis pursues IPO | Packaging Dive

Oct 17, 2024

The aluminum company’s recent filings shed light on the state of the U.S. market for beverage cans and recycling.

Novelis, the aluminum company that supplies sheet material for can distributors such as Ball, Ardagh Metal Packaging and Coca-Cola, filed its registration statement this week for a proposed initial public offering.

The 20-year-old Atlanta-based company has been owned by Indian metals company Hindalco Industries since 2007. Novelis would trade on the New York Stock Exchange under the ticker NVL.

Novelis describes itself as “the world leader in aluminum rolling and recycling.” Geographically, 42% of its global sales come from North America. By end market, 47% of sales are in beverage packaging. Novelis sold 715 kilotonnes of beverage packaging material in North America in fiscal 2024. In FY24, 57% of Novelis’ shipments were for cans; beverage and food cans are the largest end-use market in North America.

This year, it signed a new contract with Ardagh Metal Packaging to supply beverage packaging sheets to its North American metal production facilities.

Last year, Novelis signed a new “anchor customer” contract with Ball to supply aluminum sheet to its North American can-making plants. It also signed a long-term contract for can sheet with Coca-Cola’s contracting agent for North American bottlers. The Coca-Cola agreement also stipulates closed-loop recycling, in which Novelis takes back manufacturing scrap from the can-making process and converts it into new can sheet for beverage cans.

Novelis’ other major beverage packaging customers include Anheuser-Busch InBev, Can-Pack, Crown Holdings, Heineken and PepsiCo. It counts Amcor as a major customer in its “specialties” segment, which includes foil and packaging.

Novelis recently wrapped up its fiscal year 2024. In an earnings presentation this month, the company reported that demand for beverage packaging sheet recovered throughout that year. Going forward, the company believes that supply chain inventory reduction is complete and the U.S. market “remains strong.” Trends supporting growth include more beverage types being packaged in cans, like energy drinks, hard seltzers and ready-to-drink cocktails.

Recycled content accounted for 63% of its material during the fiscal year, doubling since 2009. Novelis is aiming for 75% recycled content by 2030.

In North America, Novelis operates 16 aluminum products facilities. Six of them are recycling operations drawing from used beverage cans and automotive scrap, which is cast at plants in Berea, Kentucky; Davenport, Iowa; Greensboro, Georgia; Oswego, New York; Russellville, Kentucky; and Uhrichsville, Ohio. The company says it currently recycles 82 billion UBCs annually.

In 2022, Novelis broke ground on a multibillion-dollar aluminum rolling and recycling facility in Bay Minette, Alabama. Beverage packaging capacity there is fully contracted, per the Q4 update.