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Novelis FusionTM – The new aluminium

Arabal Conference

11th November 2008

I am delighted to talk to you today about the importance of innovation in the aluminium rolled products sector. To illustrate that, I am able to refer to one of the most exciting process developments seen in our industry in recent years – one that opens the door to new applications for aluminium. Novelis Fusion does this by utilising breakthrough liquid metal technology to offer the market a multi-alloy rolled aluminium with different properties in the core andon the outside. We have dubbed Novelis Fusion as “The new aluminium”and I will show you today why that is.

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Agenda

Novelis – the company

Innovation in rolled products

Novelis FusionTM process

Novelis FusionTM in practice

Before taking you through the process and application of Novelis Fusion, I’ll talk about Novelis as a company and how we view innovation.

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Novelis – the company

Global Vision; Indian ValuesGlobal Vision; Indian Values

• 100,000 employees• 20 countries• Revenues of $28 billion• Market cap of $30 billion

Aditya Birla Group

Novelis is proud to be part of the Aditya Birla Group, as a subsidiary of Hindalco Industries Limited. The Aditya Birla Group is a diversified global conglomerate with 100,000 employees in 20 countries, annual revenues of 28 billion dollars and a market capitalisation of 30 billion dollars.Although based in Mumbai, more than half of the Group’s revenues flow from its operations outside of India, and we operate very much with a global business vision.

A large, well-respected multi-national conglomerate

Aditya Birla Group

You might be interested to see a glimpse of the business activities of the Aditya Birla Group, which reach far beyond aluminium and metals. I won’t go into these in detail, but the Group operates in diverse sectors such as:- Cement- Textiles- Carbon black used to make tyres and other automotive parts- Fertilisers- Insulators used in the transmission and distribution of electricity- Even retail…The group’s range and reach is tremendous: I find it amazing, for example, that the Aditya Birla IDEA cell phone business already has more than 24 million subscribers and is growing at a million new customers per month.We can learn a lot about innovation from businesses like that.

Globally one of the most cost efficient producers

World’s largest aluminium rolled products manufacturer

Largest custom smelter and refinery in India

Vertically integrated into copper mining in Australia

Aluminium Copper

Hindalco

Now let’s look more specifically at Hindalco:Based in Mumbai, India, Hindalco is one of Asia’s largest producers of primary aluminium and one of the most cost efficient producers in the world.And now, through its ownership of Novelis, it is the world’s number one producer of aluminium rolled products.Hindalco is also India’s leading copper producer, operating the world’s largest single-location custom smelter and refinery, backed by two copper mines in Australia.Hindalco is a publicly-traded company on the Bombay Stock Exchange.

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Novelis is a Global Industry Leader

The world’s leading producer of aluminium rolled products

Technology leader and preferred development partner of industryleaders in automotive, building, packaging and other markets

The world’s largest recycler of used aluminium beverage cans

And what about Novelis?Novelis is the global leader in the manufacture of rolled aluminium products. We have world-class rolling mills on four continents and we are focused on producing aluminium sheet and foil products for high-value market applications.Our revenues in FY2008 were US$11.2 billion.We are also the global leader in the recycling of used beverage cans. In 2007, we recycled nearly 36 billion used beverage cans. That’s enough cans to circle the equator more than 100 times!

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Revenues

Hindalco Novelis Worldwide Footprint

Novelis $11.2 Bn

Hindalco $4.7 Bn

Total $15.9 Bn

Employees

Novelis 12,700

Hindalco 19,700

Total 32,400

Revenues in US$ for the year April 1 2007 to March 31 2008

Primary AluminiumCapacity

Novelis 110 kt

Hindalco 461 kt

Total 571 kt

Aluminium Rolled Products Shipments

Novelis 2,988 kt

Hindalco 208 kt

Total 3,196 kt

Here’s what the combined Hindalco and Novelis looks like in global figures.With 32,400 employees worldwide, Novelis and Hindalco account for nearly 3.2 Million tonnes of aluminium rolled products shipments and 570 thousand tonnes of primary aluminium, generating annual revenues of $15.9 billion.

Beverage Transportation

Foil /Packaging

Construction/Industrial

Other

Novelis Shipments by Market

Novelis’ product portfolio is both diversified and high-end. Beverage cans contribute the greatest portion of total Novelis shipments globally at about 45%.Transportation is at 9%, and climbing. Foil and packaging contribute 17%.Construction and industrial products contribute 22%.As you can see, stable, high-end categories such as beverage cans, transportation and foil account for more than 70% of our total sales. This reflects the company’s global portfolio strategy and its focus on producing premium products that provide a competitive advantage and deliver higher value.

High-precision products

Long term relationships with blue-chip customers

Flexible & Semi-rigid Packaging

Printing & Lithographic

Building & Industrial

Cans & Closures

Automotive and Transportation

Novelis Supplies World Leaders

The Novelis customer base reads like a who’s who of leading global players in our key market segments.In the automotive market, our customers include major auto makers such as Jaguar, Land Rover, Audi, BMW, Ford, General Motors and Mercedes-Benz.In the aluminium can business, customers include Coca Cola, Crown Cork and Seal, Ball, Rexam and Anheuser-Busch.In the building and industrial market – Ryerson Inc. and Velux.In the lithographic market – Agfa-Gevaert , Kodak Polychrome and Fujifilm.And in the foil market -- Pactiv Corporation, Tetra Pak and Alcan Packaging.

Drive business to high-end products Competitive advantageStability and profitability

Innovation / R&D Enhance existing products and develop new high-end products

Novelis StrategyOptimising the Product Portfolio

Our strategy is to do even more of what we‘re best at - in other words, maximise output of innovative, high-end premium products. For us, the ability to give our customers a competitive advantage is the surest route to stability and profitability. But to keep achieving that, we have to improve our offering continuously through innovation at all levels.

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Innovation

A Rolled Products producer’s perspective…..

Low cost competitors emergence in commodity products

Global customers wanting global supply

To remain competitive we must

Keep focus on customer service and cost improvement

Be flexible

Innovate, innovate, innovate

The Drive to Innovate

Wherever your company sits in the supply chain, change is inevitable – and it is usually healthy. As a supplier of rolled aluminium we see our customers increasingly needing the global supply that Novelis can offer. At the same time we are faced with growing low-cost competition in commodity products.Our challenge is to keep giving our customers the service and value that they expect, but also stay two steps ahead of the emerging low-cost suppliers by constantly bringing to our customers something new and something that adds value to their business.We want to open up brand new opportunities for our customers and new applications for aluminiumAs it says here – the way to do that is: innovate, innovate, innovate

State-of-the-art research facilities

material analysis & testing, prototype production lines, hot mills, can lines, coating lines, continuous casting

Customer focused R&D applications

Global best-practice transfer

Our Goal – to Excel at Innovation

Novelis has a number of goals aligned with the company’s business strategy, none of which is more important than the goal to Excel at Innovation.And we are organised to deliver against this goal. We employ some 150 scientists, engineers and technologists in a network of customer-focused technology centres in North America, Europe and Asia.In addition to world-class facilities for materials characterisation, testing, and modelling, our Research & Technology facilities house pilot lines for the development of new and emerging technologies for our core rolled products business. Program activities cover areas such as enhanced surface properties, alloy development, recycling, casting, rolling and product development – always with an eye toward delivering customer benefits in our key product areas.Our Research & Technology personnel also provide technical support to a wide range of continuous improvement projects throughout the company and provide direct support to our operating facilities, helping to facilitate global best-practice transfer.

Listen to our customers and end consumers

Be faster!

Involve all – sales, production, R&D, etc

Innovation approach...

Our technology centres play an essential role in innovating, but they are not set up to be ivory towers – quite the opposite. They are part of an overall approach that involves sales and production as well as R&D, supported by direction from the top of the organisation that encourages innovation and thinking “out of the box”.It all starts and ends with the customer, so it is essential to successful innovation that we first of all listen carefully to what our customers want.And then once we have a good idea, we need to run with it and be the first to reach the market.

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Global Technology Network

Commitment: deliver fast innovative solutions to our customers

Kingston, Canada (Novelis Global Technology Center)Goettingen, Germany

Ulsan, Korea

Sierre, SwitzerlandDudelange, Luxembourg

Aurora, USASpokane, USA

Pindá, Brazil

So Novelis is committed to delivering fast, innovative solutions to our customers before anyone else does, leveraging the technical know-how that we have around the globe.

Foil Innovation Centre (Luxembourg) 10 times more than before

Göttingen Technology Centre lithographic, food and beverage can markets as well as pre-painted aluminium sheet

Sierre Technology Centre recognised expertise in Automotive: part of the Novelis FusionTM complex

Strong linkage & co-ordination with the global R&D centre in Kingston

European Innovation Centre“Up and Running”

In Europe alone, over the past couple of years we have set up specialist innovation centres in Luxembourg, Göttingen and Sierre.Each centre specialises in its own particular areas and has a clear customer focus and close link to sales and our plants. Working hand-in-hand in this way is our model for increasing the success rate of our innovations.

Brighter Ideas with Aluminium

And the great message is that there are plenty of opportunities for aluminium products both today and tomorrow: our job is to turn these opportunities into reality.Together with our customers we are striving to bring new ideas to market across a range of product areas – be it automotive applications, shaped aluminium bottles, attractive, durable surface finishes for appliances or electronics, or a wide spectrum of other opportunities.

Our most exciting innovation in recent years not only spans all current market applications but also goes way beyond that to open the door to brand new applications for aluminium. It does this by utilising breakthrough liquid metal technology to offer the market a multi-alloy rolled aluminium with different properties in the core andon the outside. You will all be familiar with the periodic table – we are adding a new element to that – the new aluminium – Novelis Fusion.

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Charles Martin Hall/

Paul Heroult, electrolytic process

1886

Direct Chill

Casting1938

Continuous Casting1950s

Novelis FusionTM

2006

Moving from conventional cladding to Novelis FusionTM casting.

Aluminium Innovation History

In fact, Novelis Fusion really does so much more than move us from conventional cladding. It is one of the most exciting developments in our industry over the past century and can be counted as one of the significant milestones over that period.And it is not just Novelis saying this... Indeed, Thomas W. Eagar, professor of materials engineering and engineering systems at the Massachusetts Institute of Technology, described it as “the most significant breakthrough in aluminium solidification since the introduction of direct chill casting in the 1930s.”

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Novelis Fusion™ – the process

So what is Novelis Fusion technology?

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Novelis FusionTM is a technology designed to castdifferent alloys into one ingot – simultaneously

Principle

Here you see a representation of the Novelis Fusion process, illustrating how different alloys are cast into a multi-layer ingot simultaneously, using a liquid metal process that produces a true metallurgical bond between the layers. The package is customised to meet the performance requirements of the customer application.We then hot- and cold-roll the ingot into a product with combinations of core properties and surface characteristics that were not possible before.

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No more compromises

Superior shaping

Down-gauging possibilities

What this means for the end user is that there are no more trade-offs between sheet properties, no need to compromise.On this chart, for example, you see relationship between strength and formability for conventional alloys: the stronger the alloy, the less formable it is. But with Novelis Fusion you can have the best of both worlds, without the need to compromise. A combination of excellent formability and high strength gives users better shaping performance and the potential to down-gauge using a stronger core alloy.

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Corrosion Resistance

Strength

With Novelis Fusion™ we can achieve high strengthwithout compromising on corrosion resistance.

1xxx 3xxx 5xxx(low Mg)

7xxx(no Cu)

2xxx 7xxx+ Cu

5xxx(high Mg)

No more compromises

Similarly, with conventional alloys, corrosion resistance tends to decrease in the higher strength alloys. But with the right Novelis Fusion packages we can achieve high strength without compromising on corrosion resistance.

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Tensile & Bending TestsFor both tests, failure does not occur at the interface (both at ingot stage & final gauge)

InterfaceThe interface isclean and sharp.

Product properties

The fact that Novelis Fusion uses liquid metal technology gives two clear advantages: first, it permits alloy combinations that were not possible with conventional brazing; and second, the bond between alloy layers is a true metallurgical bond with a uniform interface. Here on the left we have two tensile tests on material at the interface between the core and surface alloys. The actual interface is marked with the line. What you see is that the tensile failure occurs in one of the alloy layers and not on the interface.The two images of the bend-test also show the strength of the interface. In the close-up view on the right, the bend test crack behaves exactly like the bend test on conventional material with the crack propagating into the material and not between the clad and core layers.Finally, at the bottom of the screen we can see the clean, sharp interface between the alloy layers.

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Global availability

Since the technology was unveiled in June 2006, Novelis Fusion production capacity has been installed at Oswego in North America, Sierre in Switzerland and Ulsan in South Korea. Customer response has been so positive that this worldwide rollout of Novelis Fusion technology is also under way at Ouro Preto in South America.

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Novelis Fusion™ in practice

How and where is Novelis Fusion being used?

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Novelis FusionTM - a reality!

No more need for trade-offs!

Novelis says "and" not "or"

Let's show you how

Novelis Fusion™

As you have seen, Novelis Fusion is available globally today. It has eliminated the need for trade-offs and enable us to say to our customers that they can have X and Y rather than X or Y. Here are some examples.

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Value proposition:Highest-strength,Excellent formability,Good corrosion resistance

Jaguar Land Rover fender example:gauge reduced from 0.93 to 0.88mm 5% weight reductionReduction of cost

Formability

Strength0% 10% 20%

GaugeReductionPotential

AS250

AS3006016

6111

Novelis FusionTM

Automotive outer panels

Costs

Gauge

Novelis FusionTM

First of all, one of four examples in the automotive sector. The Novelis Fusion packages developed for this application push up the limits of strength and formability when compared with conventional aluminium alloys used.Jaguar Land Rover, for example, has been able to produce a thinner, lighter fender using Novelis Fusion with a strong core and excellent formability. This enables lower fuel consumption and emissions as well as lower life cycle cost associated with the component.

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Value propositionStrengthFormabilityCorrosion resistanceWeight-reductionEnhanced scrap management through “uni-alloy” concept

Automotive inner panels

Minor strain

Maj

or s

train

Novelis Fusion also adds value for inner panels where high formability and strength, combined with corrosion resistance are opening up new design opportunities – both in terms of product design, but also design for recycling,with Novelis Fusion being 100% recyclable. These strain curves demonstrate the increasing formability of the material.

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BMW for the 7 Series launched in Fall 2008one-piece door innerImproved processing costs due to lower assembly expense than multi-part design

Automotive inner panels

BMW has been able to design a one-piece door inner using Novelis Fusion with a combination of excellent formability and corrosion resistance. These door inners feature on the new BMW 7 Series just launched this Autumn and mean that BMW can offer its customers the performance benefits of lightweight aluminium with the manufacturing and assembly advantages of a one-piece design.

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Value propositionGlobal availability for the same specificationLean production process compared to conventional claddingQuick response to customer needsFlexible for trials and smaller quantitiesClean and oxide free interface between the layers

Novelis FusionTM is now market leader in the US brazing market

Automotive Heat-Exchangers

The quality and lead-time benefits for automotive heat exchangers are so great, that Novelis Fusion is now a market leader in North America.

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Value propositionGood and well known anodizing response of the outer layer combined with a strong inner layer in order to get the potential to down-gauge –resulting in lower costs/m2 for the customerFor painted products, good hemming response combined with a high strength core in order to have the opportunity to down-gauge.

Cost

AlMg3 Novelis FusionTM

Architecture Façades

Equally in architecture, Novelis Fusion can deliver value to fabricators. For example, combining an anodizable surface layer on a strong inner core creates opportunities to down-gauge, reducing the final cost per square metre of façade.

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Value propositionMade of a core alloy delivering high-strength, covered on both sides with another alloy bringing an outstanding surface finish capability, joined together by a perfect metallurgical bond.The package offers excellent bend forming properties and enhanced corrosion resistance performance.

BenefitsCost savings opportunities through down-gauging also leading to weight-reduction

Material bringing cost effective solutions, in aluminium,not achievable so far with standard single alloys or other materials

Enhancement of final products with customized finishes

Corrosion resistance

Household Appliances

Novelis Fusion packages have also been developed for a wide range of household appliance applications, for example where a strong core and outstanding surface finish mean that another lightweight material option is available to product designers.

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Novelis FusionTM is a great example of innovation and developing new application for aluminium rolled products.

Novelis FusionTM is now in volume production globally and is being successfully used in new applications and many more are being developed hand in hand with customers.

Novelis FusionTM offers customers the opportunity:To enhance their current products,To reach cost effective solutions,To bring innovative products to the market,

Summary

So, in conclusion, Novelis’ focus on innovation means that we have today an exciting new material that is available globally in full production quantities.A material that is already creating value and design benefits for customers and end users in a wide range of sectorsA material that is opening up new applications for aluminiumand we are only just at the beginning!

www.the-new-aluminium.comwww.novelis.com

Ladies and gentlemen, I give you Novelis Fusion -- “the new aluminium.”

Thank you.