Net revenues: R$ 5.4 bn
Adjusted EBITDA: R$ 536 mm
Social investment¹: R$ 3.3 mm
___Company resources: R$ 2.1 mm
___Votorantim Institute: R$ 1.2 mm
¹Amount managed by the Votorantim Institute. It does not include additional resources for initiatives to combat COVID-19.
The aluminum market started 2020 with challenges beyond the COVID-19 pandemic. Volatility in the markets caused by the trade war between the United States and China, uncertainties about industrial activity in the main aluminum consuming markets and announcements about China’s increased capacity created a scenario of aluminum oversupply and drop in prices. With the adoption of social distancing measures and reduced activity in some economic sectors due to the pandemic, the already-challenging situation deteriorated, causing the price of aluminum on the London Metal Exchange (LME) to reach US$ 1,422 per ton in April, a record low since 2009.
Under this situation, CBA installed a Crisis Committee to review commercial and operational strategies in order to protect its financial position, the health and well-being of its employees and the communities where the company operates. With agility, it sought alternatives in the market, seizing opportunities such as the export of ingots and increased demand for aluminum sheets for packaging, caused by food and beverage consumption during the pandemic.
The normalization of markets starting in July, the recovery of confidence and the resumption of industrial activity also brought an improvement in prices. On the other hand, there was a drop in sales of products with higher added value. In this scenario, the company recorded net revenues of R$ 5.4 billion and adjusted EBITDA of R$ 536 million for the year, an increase of 3% and a decrease of 38%, respectively.
In the organizational field, the company took important steps to reinforce its position on ESG issues: it participated in the Global Compact and the Brazilian Business Council for Sustainable Development (Conselho Empresarial Brasileiro de Desenvolvimento Sustentável, CEBDS) actively; developed a project to set internal targets to contribute to the global sustainability agenda; joined the Science Based Targets, committing to reduce its emissions to limit global temperature rise to 1.5 ºC by 2030; and responded to the CDP questionnaire for the first time, achieving a score of “A-“, which puts CBA in a leadership position in this area.
CBA also did extensive work to publicize its purpose and sustainability mandate, leading environmental, social and governance issues to be incorporated across the board within the company. In this area, the Sustainability Committee worked to include best practices in ESG in all internal decisions, including the operation of bauxite mines, investment allocation, and validation of the supply chain. The ambition to be a benchmark company in sustainability involves the production of low carbon aluminum, an area where the company stands out globally. One example during the year was the contracting of R$ 500 million in Green Export Credit Notes (Notas de Crédito de Exportação, NCEs) linked to sustainable projects that encourage exports. These were the first NCE green bonds issued in Brazil, demonstrating the company’s leading role in sustainability.
Within the scope of corporate culture, significant progress was made during the year in the area of diversity, with the engagement of the company’s leadership, specific training and the creation of the Diversity Committee. CBA also launched the Diversity and Inclusion Guide, which details the internal policy that guides these issues and addresses concepts like gender equity, race, LGBTQIA+, People with Disabilities (PWD) and age.
CBA also advanced projects focused on increasing productivity and sustainability, such as the Green Soderberg, which aims to reduce gas emission in aluminum production; the installation of a filter press in the Alumínio unit, in São Paulo, which replaces wet waste disposal in the dam with dry waste disposal; and the execution of joint contracts with Votorantim Energia for the construction of wind farms and energy generation to further diversify the company’s energy matrix, which is primarily made up of renewable sources. Another highlight was the installation of a biomass boiler at the alumina refinery, which enabled the substitution of fossil fuels for wood chips, leading to significant reductions in greenhouse gas emissions.
Also in 2020, the Metalex brand, a CBA scrap recycling subsidiary, was repositioned through an investment of R$ 50 million to increase production from 70,000 to 90,000 tons and the use of aluminum scrap from 60% to 80%, thereby reducing the production’s carbon footprint.
Another highlight in the year was the conclusion of the acquisition of a rolled steel unit located in Itapissuma, in the state of Pernambuco, which established CBA’s leadership in the packaging market in Brazil and placed it in an important position in the Americas. Also, Jervois Mining’s intention to purchase the São Miguel Paulista nickel unit, in São Paulo, was formalized and is currently subject to customary closing conditions.
