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Business EconomyPosted at: Sep 14 2016 7:06PM


Hindalco poised for greater growth: Kumar Mangalam

New Delhi, Sep 14 (UNI) Hindalco Limited chairman Kumar Mangalam Birla has said the future of the company is poised for greater growth given its robust business portfolio that ensures long-term sustainability Bolsters renewed sense of optimism.
The company registered a consolidated turnover of 15 billion dollar and a PBIDTA of 1.5 billion dollar.
Addressing shareholders at the Hindalco’s 57th Annual General Meeting, Mr Birla providing an overview commented that “In FY 16, the Aluminium industry witnessed significant challenges as the average realisations crashed. The average aluminium LME was 16 per cent lower than the previous year while the premium was down by 68 per cent as compared to that of FY 15. Regardless the aluminium demand continued to remain strong.
He said the cost deflation, especially energy costs coupled with depreciation of several local currencies vis-à-vis USD, resulted in a sharp decline in the aluminium cost curve. This exerted a lot of pressure on the LME prices. Currently, though the prices appear to have bottomed out. In the Indian context, the demand scenario has been encouraging.
“The expected economic turnaround and improving industrial activity bode well for Hindalco. The decline in coal prices in India was a major relief. Depreciation of the Indian Rupee also helped Hindalco to an extent. However, the overcapacity in China and the consequent flooding of aluminium in the Indian market severely upset the balance, as imports surged in FY 16,” he added
Against this challenging backdrop, Mr Birla said the Hindalco delivered an exceptional operational performance. The aluminium business posted its highest ever production, crossing the one million ton mark for the first time. The Company’s three Greenfield projects, Utkal, Mahan and Aditya Aluminium, have now ramped up to their full capacity.
Mr Birla said, “Hindalco has invested substantially in world-class upstream and downstream facilities. We are fully attuned to the Prime Minister’s Make in India initiative. Towards this, we shall continue to bring world class manufacturing practices in future as well, to make India even more of a global manufacturing hub”.
On the outlook, Mr Birla’s said, “notwithstanding the strong operational performance, the short term outlook is challenging given the structural oversupply and depressed pricing scenario. The sharp increase in imports will continue to impact sales. On the positive side, demand in India is expected to be strong, as we see an improved outlook on industrial and infrastructure growth.”
He emphasized that the Company’s thrust will be on operational excellence and increasing the productivity of new assets, cash conservation and de-leveraging. Hindalco has already secured around 25 per cent of its coal requirement in the recently concluded coal linkage auctions. This, along with the existing linkage for Renusagar power plant and captive coal mines, will provide adequate coal security and good visibility to power cost for aluminium production.
Mr Birla characterized this is as a significant development, considering the Company’s cost competitive alumina value chain, including Utkal Alumina, which should help bolster Hindalco’s cost competitiveness.
UNI ADP SW RJ 1906
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