Most Hindalco expansion plans to be commissioned by Q1 FY14

Most Hindalco expansion plans to be commissioned by Q1 FY14

Mumbai: Aditya Birla Group’s flagship company Hindalco Industries said that a majority of its expansion plans would be commissioned by the first quarter (Q1) of the financial year 2013-14.

“The company’s expansions projects are on track, and are expected to deliver as per schedule," the company said in a statement.

The expansion of Hirakud Smelter & Power from 155 KTPA to 161 KTPA is expected to be commissioned in Q2 of FY11, while the expansion from 161 KTPA to 213 KTPA would be commissioned in Q4 FY12. The production of flat-rolled products from Hirakud would start by Q2 FY12, the statement said.

The company’s Utkal Alumina Refinery, a 1.5-million tonne per annum (MTPA) project in Orissa aimed at producing alumina from bauxite, is expected to be ready by Q2 of FY12.

The company said that its Mahan Aluminium Project is expected to be ready by Q2 FY12. Mahan is a smelter-power plant complex that boasts of a 359-KTPA aluminum smelter and a 900-MW captive thermal power plant in Madhya Pradesh. The project has a total capital expenditure plan of Rs9,200 crore.

The Aditya Aluminium Project is expected to start production by Q3 FY12. “Both Aditya Refinery Project and Jharkhand Aluminium Project are likely to commence in Q1 FY14," the company said.

The company’s smelting capacity at Hirakud is intended to be further expanded from the proposed 213 KTPA to 360 KTPA with a corresponding increase in back-up captive power from the proposed 467.5 MW to 967.5 MW.

To de-bottleneck and increase capacity in overseas markets, primarily South America and Asia, its subsidiary — Novelis — has increased its capital expenditure plan by approximately $150 million or 148% for fiscal year 2011, as compared to the previous year.

A significant amount is aimed at expanding its rolling operations in Brazil, the statement said.

This investment will increase capacity by over 50% and cater to the increasing demand for flat-rolled products in those regions. The expansion is expected to be completed by late 2012, the company said.

The volatile financial and commodity markets in FY09 and FY10 have tested the resilience of the company’s business model, the company said, adding that the improvement in commodity prices and domestic/global demand is encouraging.

The South American and Asian markets are expected to continue growing, and North America and Europe may see a moderate increase in demand. The results are expected to continue to strengthen — given the market conditions, price increase and continued cost management initiatives.

Hindalco’s continued focus on cost control, operational efficiency and integrated business will enable the company to consolidate its cost leadership as well as position in the value-chain.

The company still remains on track with respect to growth projections despite the challenging ground conditions, Hindalco said, adding that the outlook of the company remains cautiously optimistic for FY11.