Global Trends in Aluminum and Aluminum FRP Industry

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1 Global Trends in Aluminum and Aluminum FRP Industry Korea Nonferrous Metal Association Seminar Sachin Satpute Vice President, Sales & Marketing Novelis Korea Limited November 17, 2010

2 Agenda Introduction Novelis Inc & Novelis Korea Ltd Global Economic Trends Impact on Aluminum Global Aluminum & Al. Flat Rolled Products (FRP) Markets Global Aluminum FRP Outlook Questions and Answers 2

3 Introduction - Novelis Inc. & Novelis Korea

4 Novelis A Global Company, Five-Year Old Company with 100 Year Old History

Novelis -- A Global Leader The world s leading

7 billion in revenues for FY2010 and 11,600

5 Novelis -- A Global Leader The world s leading producer of aluminum rolled products The world s largest recycler of used aluminum beverage cans $8.7 billion in revenues for FY2010 and 11,600 employees Key part of the Aditya Birla Group s current operations and future growth plans 5

6 Global Al. Flat Rolled Product (FRP) Industry: Novelis World Leader in FRP Global FRP Production 100% = 17,192 kt Top 6 = 54% Novelis / Hindalco #1 rolled products supplier worldwide Others Aleris Alcoa Norsk Hydro Alcan Chinalco/Chalco Leader in: Can, Auto, Foil Rolling technology Continuous casting technology UBC Recycling Source: CRU estimate 2008 data (Feb. 2009) 6

7 Novelis Shipments by Market Portfolio focused on premium products Construction 4% Lithography 3% Other 9% Beverage Cans 52% Transportation 7% Industrial 11% Based on FY2009 shipments of 2.94 m t Foil & Packaging 14% 7

8 Novelis Produces Premium Sheet for High-Value Markets

9 Novelis Supplies World Leaders Cans & Closures High-precision products Long-term relationships with blue-chip customers 9

10 Japan

11 Novelis Korea Limited Leading Rolled products supplier in Asia with 7.5% of market share in CY2009 Employees 1,200 Revenues $1.5 Bn Shipments 520 kt Novelis Korea Limited Yeongju Plant Seoul Office -23 rd Floor Ulsan Plant Based on FY 10 results 11

12 Global Economic Trends - Impact on Aluminum

13 Asia will drive the economic growth China & India Rising 0% GDP Growth Versus GDP/Capita ( ) GDP Growth ( ) 2% 4% 6% Brazil (2007) India (2050) Brazil (2050) China (2050) EU (2007) United States (2007) EU (2050) United States (2050) India (2007) 8% China (2007) $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 GDP per Capita Note: (1) Size of bubble is proportional to GDP of the economy (2) EU countries include France, Germany, Italy and UK Source: EIU, Goldman Sachs BRIC Report

Emerging Market Companies in the Fortune 500 70 companies in Fortune 500 in 2007, up from 20 in 1997 Likely to be 1/3

4%) 61% 39% BRIC Mature Markets / G6¹ (2008 2050; CAGR: 3.

14 Emerging Market Companies in the Fortune companies in Fortune 500 in 2007, up from 20 in 1997 Likely to be 1/3 of the list by % 2008 Total = $40 Trillion World GDP 2050 Total = $139 Trillion (CAGR 4.8%) 78% (CAGR 1.4%) 61% 39% BRIC Mature Markets / G6¹ ( ; CAGR: 3.0%) Note: (1) Mature markets refers to the G6 -- France, Germany, Italy, Japan, UK, US Source: Goldman Sachs BRIC Report; EIU Source: Goldman Sachs BRIC Report; HBR July 09; E&Y Oct 09

15 Demographics Drive Change 2,000 1,800 1,600 World Population Trends ( ) India Population (Millions) 1,400 1,200 1, China bn ~9bn US Brazil Russia Germany Source: Credit Suisse, Oct. 2009

17 Global Demand for Aluminum is Rising!

Global Trends Point to Increasing Aluminum Demand

Infrastructure Increasing Global Wealth Material

other materials in emerging markets Sustainability

18 Global Trends Point to Increasing Aluminum Demand Economic Development Urbanization Modernization of Infrastructure Increasing Global Wealth Material Preference Increasing substitution to aluminum from other materials in emerging markets Sustainability Growing awareness of environmentalism and demand for recycled products 18

19 Trends in Aluminum Demand (CY09-14) Can Sheet Automotive Industrial/ Electronics Overall Demand ASIA 4-8% 8-10% >10% 8% N. AMERICA 0% >15% 8-10% 4% EUROPE 2-3% 7% 4-6% 4% S. AMERICA 6% 10% 10% 7% GLOBAL 3-5% >10% 10% 6% Source: CRU, Novelis Estimates

20 Global Aluminum & Aluminum FRP Markets

21 Global Aluminum Industry: Aluminum consumption by End-use Total 51 Million Tonnes Source: CRU, Hindalco estimates for CY08 21

22 Global Aluminium FRP Market Outlook Until 2015, the global FRP market is expected to grow by another 5,000kt Growth on broad basis in terms of market segments Worldwide Aluminum Consumption: million tons FRP Consumption: 2008 to mio t CAGR (avg. 4.0%) 20% 2.0% Beverage Can 17 mio t 23% 27% 4.4% Foil / Packaging 26% 9% 2% 2% 8% 30% 8% 2% 8% 3% 33% 3.3% 6.2% 3.9% 5.2% 5.3% Transportation Aero Construction Litho Industrial Source: Novelis Fact Base 2009; CRU

24 Sources of Consumer Demand

25 Consumer Electronics

26 Automobiles

27 Packaging

28 Global Aluminum FRP Outlook

29 Aluminum FRP - Major Growth Opportunities Economic growth as fundamental driver of aluminium consumption Major growth opportunity in Asia, particularly in Emerging Markets, due to comparably low aluminium penetration 30.0 China potential? Will India become a Can-Country? Leapfrog effect in car light-weighting? 25.0 Aluminum Consumption vs. GDP per Capita Al. Consumption / Capita (kg) South Korea 20.0 Europe Canada 15.0 Australia Japan China USA Brazil MENA India 0.0 $- $10,000 $20,000 $30,000 $40,000 $50,000 Source: Harbor Intelligence, Novelis GDP per Capita Market Size

30 Asia is surpassing both the US and the European automotive markets Sales Volume (M) New Car Sales: US versus EU and Asia 1 ( ) Asia US EU Normalized Index (2007) New Vehicle Sales Growth ( ) China India ROW US EU As auto markets & production move East the supply base for the industry will as well Impact on aluminum demand? Note: 1) Selected Asian countries include China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, Taiwan, Thailand and Vietnam Source: Global Insight Data 30

31 Global FRP Outlook Split by Region Main regional growth areas will be Asia (China, India), SA (Brazil) and the MENA kt Aluminum FRP Consumption by Region Outlook CAGR % 2.8% 4.0% 0.4% S. America Europe NVL: 8-10% p.a. 0.0% 11.0% 6.3% 1.0% 4.3% 6.2% 10% 9% N. America MENA Asia India China NVL: 5-7% p.a. Source: Novelis Fact Base 2009, CRU

32 Main FRP Growth Areas are Latin America, Asia-Pacific and ME & Africa Asia-Pacific will account for a majority of the growth in the next five years. China will be the main growth engine in Asia-Pacific. Increase in annual FRP consumption, 2015 vs Kt Source: Novelis Fact Base; CRU

33 Changing FRP Industry Dynamics Chinese Aluminum FRP & Foil Capacity Rapid expansion in China s Rolling Capacity ( 000 tons) Growing demand is driving aluminum fabrication capacity. New Mill investments Moving towards high value-added products in the future. Source : Antaike, Novelis Korea 33

34 Closing Comments Aluminum Flat Rolled Products (FRP) is the largest aluminum product form use and Novelis is the #1 FRP supplier worldwide. Asia, particularly emerging economies, will drive the demand growth in Aluminum. Global trends in economic development, material preference and sustainability point to increasing aluminum demand. Growth in Aluminum FRP will come from Automotive, Consumer Electronics & Packaging segments. Asia will lead the growth of FRP. China is the growth engine for aluminum FRP demand in Asia, which is the largest aluminum FRP market. Despite strong outlook, aluminum FRP capacity in China will stay ahead of demand. 34

35 Brighter ideas with aluminum Thank you!

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