Indian aluminium producer Hindalco expects to spend ₹26 billion (US$370 million) in capital expenditures over the course of the current year, most of which will be devoted to speeding expansion operations at its Utkal alumina refinery and as part of its five-year push to double its value-added production. Such was the message of Hindalco’s managing director Satish Pai to domestic media late last week.
“We are embarking on the next growth phase,” said Pai in comments made regarding Hindalco’s fourth-quarter numbers.
Already India’s premier primary metals downstream company, Hindalco is targeting a boost of over 300 thousand metric tons in value-added products to a total of 600 thousand metric tons over the course of the coming five years. Ultimately Hindalco plans to increase value-added production to 1 million metric tons per annum, with the company having already spent ₹10 million on the effort so far. Included in the value-added push is a greenfield extrusion plant in Gujarat and a doubling of aluminium rolling capacity in Hirakud and Aditya, explained Pai.
In addition, Pai said that Hindalco is adding 500 thousand metric tons per annum in refining capacity to the alumina refinery in Utkal, which is projected to come online during the 2021 fiscal year.
Pai’s comments came as Hindalco’s fourth-quarter earnings were released, showing a 17-percent drop in net profits. The firm chalked up the decline to falling aluminium prices at the London Metal Exchange, noting a drop from last year’s high of over US$2,000 per metric ton to around US$1,850 per metric ton. However, Pai suggested that the worst is behind the aluminium market.
“Right now, the aluminium business is experiencing the worst-case scenario and has now tested the bottom,” he said.
Pai went on to opine that, should trade tensions continue to escalate between the governments of the United States and the People’s Republic of China, aluminium prices will likely continue to climb.