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BW Businessworld

Steady As A Rock

Hindalco’s acquisition of Aleris Corporation in April 2020, through its subsidiary Novelis Inc., cemented the company’s position as the world’s largest flat-rolled products player and recycler of aluminium.

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The metals flagship company of the Aditya Birla Group, Hindalco Industries is ranked among the top three in the list of Fastest Growing Companies for FY20 based on a strong and steady performance over the past five fiscal years. 

With a consolidated turnover of $18.7 billion, Hindalco is an industry leader in aluminium and copper. Hindalco reported a consolidated EBITDA of Rs 15,536 crore on a turnover of Rs 1,18,144 crore in FY2019-20. Hindalco’s aluminium and copper business in India, and Novelis continued to deliver steady operational performance, despite lower LME (London Metal Exchange) prices and tough market conditions. The major enablers were lower input prices and better cost efficiencies. Hindalco (including Utkal) continued to achieve record aluminium production levels at 1.314 million tonnes and alumina production of 2.735 million tonnes in FY2019-20.

Value-added Products 

Utkal Alumina also registered its best-ever production in FY20. All plants operated at their designated capacities. Production of aluminium value-added products (excluding wire rods) stood at 319 KT in FY20 reflecting a flattish y-o-y growth and Hindalco’s focus on strengthening its downstream portfolio to become further delinked from LME volatility. 

In the copper business, cathode production stood at 321 KT, which was lower compared to the previous year as there was loss of production on account of lockdown and plant shutdown in March 2020. Continuous cast rod production was at a record high of 263 KT, up 7 per cent y-o-y because of continuous ramp-up of the CCR#3 plant at Dahej.

Hindalco’s acquisition of Aleris Corporation in April 2020, through its subsidiary Novelis Inc., cemented the company’s position as the world’s largest flat-rolled products player and recycler of aluminium.

Hindalco’s state-of-the-art copper facility comprises a world-class copper smelter and a fertiliser plant along with a captive jetty. The copper smelter is among Asia’s largest custom smelters at a single location. 

In India, the company’s aluminium units across the country encompass a whole gamut of operations including bauxite mining, alumina refining, coal mining, captive power plants and aluminium smelting, downstream rolling, extrusions and foils. Today, Hindalco ranks among the global aluminium majors as an integrated producer and a footprint in 9 countries outside India. 

The metal industry, and particularly aluminium and copper, faced a volatile and challenging year in 2019-20. The subdued growth in calendar year 2019 was a result of rising trade barriers, uncertainty surrounding trade and geopolitics and region-specific structural factors. The impact of Covid-19 on global growth since March 2020 has further depressed the economic outlook for the year ahead.

Hindalco saw a strong consolidated performance in FY2019-20, reflecting its resilience in the face of market cycles. This was aided in part by a consistent record performance from Novelis, coupled with stable performance of the Indian aluminium and copper businesses. 

Said Kumar Mangalam Birla, Chairman, Hindalco Industries, “Over the last decade, Hindalco has transformed itself from a company that was heavily dependent on the volatility of the LME into one that is a portfolio of stable and value-added earnings today. It has consistently delivered to its stated commitment of size, scale, operational excellence and profitable growth. This journey has been punctuated by some bold bets and many patient investments. Novelis, which was acquired more than a decade ago, was one such bet. In fact, it has established itself as one of the best large acquisitions overseas by any Indian corporate.”