Fresh off the development of a downstream aluminium plant in conjunction with Odisha Industrial Infrastructure Development Corporation (Idco) and the announcement of plans to partner with Rusal and Almex on other downstream projects, India’s National Aluminium Company (Nalco) announced earlier this week plans to invest ₹5.52 billion (US$76 million) in another downstream aluminium project to be located in central Odisha.
According to domestic media, the project will be built on a 188-acre tract in Kamkhyanagar and funded entirely from Nalco funds. The plant will employ more than 1,700 workers and is slated to produce up to 170 thousand metric tons per annum of aluminium foils, rolled products, wheels, and extrusions.
Tapan Kumar Chand, Nalco’s chairman and managing director, says the project reflects the increasing demand for value-added products.
“Nalco’s focus is on constant value addition. There is huge demand for value added aluminium products. Apart from catering to the demand, product diversification will also shore up our margins.”
Chand’s comments hint at an increased focus by Nalco on downstream aluminium production. Though the firm has been bolstered by alumina sales over the past several years, the increasingly volatile market for it may have caused company brass to search for a better alternative.
According to an unnamed analyst who spoke to domestic media, the project will offer the company a safer and more stable revenue stream than that of raw aluminium.
“Nalco is possibly looking for a safe bet in aluminium downstream products. Volatile prices and currency fluctuations are a worry for metal focused companies though Nalco with a huge cash surplus and robust export earnings offsets that risk”
This project is but the latest of several announced this year by the state-run aluminium firm. Earlier this year Nalco announced an investment of ₹1.31 billion in a 40 thousand ton per annum aluminium wire rod manufacturing unit and a ₹2.5 billion joint venture with Almex to produce automotive-grade aluminium. The firm is also negotiating with Rusal on a project to build a separate downstream aluminium plant.