Granges reopened its Salisbury, North Carolina, plant and resumed the previously halted upgrade of its Newport, Arkansas, facility in the third quarter as North American aluminum demand rebounded in several key end-use sectors, the company said Oct. 22.
Upgrade on the Newport's third rolling mill will be completed by the end of the first quarter in 2021, bringing the plant back to its full 20,000 mt/year aluminum production capacity, Granges CEO Johan Menckel told investors during an earnings call.
Granges suspended work on the Newport upgrade and temporarily closed the Salisbury facility earlier this year due to market disruptions in key end-markets caused by the coronavirus pandemic.
The Salisbury plant manufactures aluminum products for the HVAC and automotive heat shield markets, with a nameplate capacity of 40,000 mt/year.
Menckel said Newport's new capacity will target the US light gauge foil market with a focus on specialty packaging applications for food, healthcare and pharmaceutical products.
"We know that the light-gauge foil market was undersupplied in US," Menckel said. "Due to COVID-19 and related changes in consumer behavior, demand has increased further as purchases of ready-made food and pharmaceuticals have increased."
Menckel said market conditions also improved in the automotive sector, where year-over-year production and sales declines in Q3 were much slimmer than they were in the second quarter, especially for the Asia and North America markets.
Demand in the Americas HVAC market showed the most positive trends for Granges' business, Menckel added.
"The summer season in the US has been unusually long and warm this year, which has a positive impact on sales of air conditioning units, and as many people are now working from home because of COVID-19, there is an increased need for better indoor climate," Menckel said. "When looking at Granges' sales volume development during the third quarter, we can clearly see the impact of the strong HVAC market and the start of the recovery of the automotive market."
The Sweden-based rolled aluminum producer shipped 86,700 mt in Q3, a 1% increase from the same quarter last year.
Granges posted a profit of SEK 124 million ($14.1 million) on SEK 2.58 billion in sales in Q3, down from an SEK 198 million income on revenue of SEK 3 billion for the same period last year.
