GFG Alliance is creating a new global aluminum enterprise, which will consolidate the aluminum operations acquired in recent years into a single entity. The new vertically-integrated aluminum group, known as ALVANCE Aluminium Group, aims to drive synergies and take full advantage of opportunities to expand.
“The creation of ALVANCE highlights the global nature of our ambitions,” said Sanjeev Gupta, chairman of GFG Alliance. “Given the rise in customer demand for stronger, lighter-weight, recyclable materials, we see aluminum as a key opportunity for growth and sustainable profitability. However, we operate in an international market that’s both cyclical and under competitive pressure, and so by combining our businesses, we’re looking to achieve greater synergies, increase efficiencies, and ensure the business is fit to meet the challenges ahead.”
ALVANCE will be headquartered in Paris, France, with Arnaud de Weert appointed the chief executive. “I am delighted to be taking this new ALVANCE business forward for GFG Alliance,” said de Weert. “ALVANCE sits at a pivotal moment in its international development and with a rich history in aluminum, I can think of no better place than France to base this new enterprise.”
ALVANCE merges GFG Alliance’s assets across the aluminum supply chain – from raw materials through to finished components. The company operates two aluminum smelters and three casting facilities for the supply of vehicle components.
GFG acquired the Lochaber smelter in Fort William, Scotland, from Rio Tinto in 2016 for €330 million — the only remaining aluminum smelter in the U.K. The facility utilizes hydropower and biofuel to power its operations, which produce up to 50,000 tonnes of slab and sow every year. Since the acquisition, the company has invested nearly £5 million in preparatory work for a downstream manufacturing plant in Lochaber. Options under consideration include an automotive wheels plant or alternative industrial uses for the liquid aluminum produced in the Lochaber smelter – such as industrial extrusions or water bottles. The Lochaber smelter recently celebrated its 90th anniversary.
In early 2019, GFG completed its acquisition of Rio Tinto’s aluminum smelter in Dunkerque, France for US$500 million. Now called ALVANCE Aluminium Dunkerque, the facility produces around 285,000 tonnes of primary aluminum a year. It is the largest primary aluminum smelter in Europe, manufacturing aluminum slab and ingot with over 99% purity. The ingot and slab are requested for a number of value added applications in the transport, automotive, aerospace, packaging, building and construction industries.
The company also operates three casting operations in France. ALVANCE Wheels France is a manufacturer of aluminum wheels in Chateauroux. ALVANCE Aluminium Technologies Poitou and ALVANCE Cast Products Poitou, both located in Poitou, produce cast parts for engines and vehicle drive trains.
“As the majority of our current aluminum assets are in France it was a natural decision to headquarter our new operation in Paris. We are immensely proud to be playing a role in the reindustrialization of a country with such a proud manufacturing and engineering heritage and look forward to ALVANCE helping us make even greater strides towards our goals,” said Gupta. “In Scotland, we are seeking to extend ALVANCE’s aluminum investments in Fort William.”
The company announced plans to commit to sustainability within its aluminum operations through two programs — CN30 program, which aims to make the operations carbon neutral by 2030, and GREENALUMINIUM, which focuses on recycling and upcycling scrap metal using electric arc furnaces powered by renewable energy.
The group already exploits low-carbon power sources. For example, the Fort William smelter is powered by GFG Alliance’s hydroelectric station, and the Dunkerque smelter uses the existing low-carbon French energy mix derived mainly from nuclear and hydro sources.
“GFG Alliance aims to be at the vanguard of sustainable production of materials that will help the automotive and other sectors deliver lighter, greener, more efficient products – ALVANCE will champion this program with GREENALUMINIUM,” said de Weert. “To do this ALVANCE will drive synergies, capitalize fully on our existing skills and build new expertise in order to serve the different parts and evolving needs of these markets.”
Rolling Mill Acquisition
ALVANCE has also reached an agreement to acquire the aluminum rolling mill in Duffel, Belgium from Novelis. The acquisition of Duffel would enable the group to transport liquid metal from the company’s Dunkerque smelter directly to the nearby Belgium plant, thereby cutting costs.
“The deal is consistent with GFG Alliance’s strategy to create an international, vertically integrated aluminum business,” said a GFG Alliance spokesman in a statement. “The addition of Duffel to our value chain would unlock significant synergies for our production sites at Dunkerque and Lochaber, specifically regarding freight and R&D and would also enhance our product offering.”