Hindalco Industries, the country's largest producer of primary aluminum, will use its Novelis acumen to increase its "recycling capabilities."
The company, which is in the midst of raising funds through a share sale, is "identifying strategies" to plan a dream aluminium business across the globe.
"We are going to carve out recycled aluminium, which will become an important feature in our business," revealed Debu Bhattacharya, Hindalco MD, in an interaction with the media soon after the company announced fourth quarter results.
Hindalco is the midst of raising Rs 12,000 crore — its largest-ever fund raising — through a combination of equity and debt. The funds will help repay bridge loans raised to acquire North American aluminium major Novelis a year ago for $ 6 billion.
The company said it had a long-term plan to increase profitability. "We have to increase rolling capacities and increase recycling capabilities," said Bhattacharya. His plan to "sweat the assets more" for an "extremely rewarding experience" is to get Novelis to share its critical technology on recycling.
Hindalco is still a primary aluminium-maker, but hopes that in the coming years, customers will upgrade and automakers and beverage firms will opt to use more aluminium, like in the West.
Hindalco's blistering growth in the last three years through brownfield expansion and a slew of acquisitions, which included Novelis and a couple of Australian copper mines, saw consolidated revenues leap 211% to Rs 60,013 crore, with revenue from the aluminium business accounting for Rs 47,054 crore and copper revenue pegged at Rs 12,340 crore.
The results included Novelis' performance from May 16, 2007 to March 31, 2008.
Hindalco's plan vests in de-risking its business and beating the cyclicality of the commodity market. It plans to do this through a spread of currencies, by operating in several countries and being present across the aluminium value chain.
"Novelis doesn't produce anything for India, nor do we (Hindalco sell in their markets), said Bhattacharya. "We produce for the bottom end and they for the top end."
Bhattacharya's plan, "to move from a commodity portfolio to a value added portfolio", should be understood in this light.
The year under review has been tough for aluminium-makers. The rupee appreciated 11%, while aluminium prices on the London Metal Exchange fell by $41 per tonne. Further, all other costs, including coal, rose, increasing input costs. One tonne of aluminium, requires 16000 kw of power to make.
"Our earnings are in dollars, so whenever the rupee appreciates we suffer. Our business is energy intensive, and costs in this front are shooting up as well," said Bhattacharya. "Fortunately the rupee is not appreciating and we have a few captive coal mines now, which will help us put a ceiling on input costs," he added about the present scenario.
The company, which is in the midst of raising funds through a share sale, is "identifying strategies" to plan a dream aluminium business across the globe.
"We are going to carve out recycled aluminium, which will become an important feature in our business," revealed Debu Bhattacharya, Hindalco MD, in an interaction with the media soon after the company announced fourth quarter results.
Hindalco is the midst of raising Rs 12,000 crore — its largest-ever fund raising — through a combination of equity and debt. The funds will help repay bridge loans raised to acquire North American aluminium major Novelis a year ago for $ 6 billion.
The company said it had a long-term plan to increase profitability. "We have to increase rolling capacities and increase recycling capabilities," said Bhattacharya. His plan to "sweat the assets more" for an "extremely rewarding experience" is to get Novelis to share its critical technology on recycling.
Hindalco is still a primary aluminium-maker, but hopes that in the coming years, customers will upgrade and automakers and beverage firms will opt to use more aluminium, like in the West.
Hindalco's blistering growth in the last three years through brownfield expansion and a slew of acquisitions, which included Novelis and a couple of Australian copper mines, saw consolidated revenues leap 211% to Rs 60,013 crore, with revenue from the aluminium business accounting for Rs 47,054 crore and copper revenue pegged at Rs 12,340 crore.
The results included Novelis' performance from May 16, 2007 to March 31, 2008.
Hindalco's plan vests in de-risking its business and beating the cyclicality of the commodity market. It plans to do this through a spread of currencies, by operating in several countries and being present across the aluminium value chain.
"Novelis doesn't produce anything for India, nor do we (Hindalco sell in their markets), said Bhattacharya. "We produce for the bottom end and they for the top end."
Bhattacharya's plan, "to move from a commodity portfolio to a value added portfolio", should be understood in this light.
The year under review has been tough for aluminium-makers. The rupee appreciated 11%, while aluminium prices on the London Metal Exchange fell by $41 per tonne. Further, all other costs, including coal, rose, increasing input costs. One tonne of aluminium, requires 16000 kw of power to make.
"Our earnings are in dollars, so whenever the rupee appreciates we suffer. Our business is energy intensive, and costs in this front are shooting up as well," said Bhattacharya. "Fortunately the rupee is not appreciating and we have a few captive coal mines now, which will help us put a ceiling on input costs," he added about the present scenario.
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