Hindalco Industries, an Aditya Birla Group company, plans to restart all the projects put on hold due to Covid pandemic and invest about ₹ 2,700 crore in this fiscal against ₹1,600 crore investment made in FY’21.
The company had cut the proposed capex from ₹ 2,500 crore last June due to Covid and paused downstream project in Hirakud in Western Odisha. It also went slow on 34,000-tonne aluminium extrusion plant at Silvassa with an invesment of ₹730 crore.
Satish Pai, Managing Director, Hindalco Industries, said the demand for aluminium has surpassed the pre-Covid levels and the company is confident that revival in demand will sustain in coming days despite concern of third wave of Covid.
Unlike last year, the company has not seen any exodus of workforce this time around and plants were running to the optimal level, he said.
The biggest challenge now is to get the entire workforce vaccinated as early as possible than stopping the exodus, he added.
Despite the local Covid restrictions, aluminium demand has been strong from packaging, building and construction while sales to the automobile sector has slowed down since April, said Pai.
“We expect aluminium prices to remain firm as supply side is constrained by shut down of inefficient plants in China due to its ESG commitments,” he added.
On fall in copper demand, Pai said the sharp increase in copper prices has pushed up working capital need of user industries leading and slowdown of few projects. The copper demand is about 85 per cent of the pre-Covid levels.
On the user industry concern over high metal prices, he said that robust demand and shortage of supply have been driving prices in the international market and the user industry needs to cope with the prevailing prices as it is market-driven.
Also read: Hindalco net triples to ₹1,928 cr on better realisation, lower cost
Earlier, a few projects were slowed down on hopes that copper prices will come down but in contrary it started moving up, he said.
The increase in spread between aluminium and scrap prices has pushed up scrap imports into India though aluminium imports has been at reasonable levels, he said.
The government needs to soon fix the remission rate at five per cent for the Aluminium sector under RoDTEP (Remission of Duties or Taxes on Export Products) scheme so that Indian exports remain competitive in global markets, said Pai.
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