Hindalco to invest ₹250 crore in new wire-rod plant in Dahej

Hindalco Industries, an Aditya Birla Group company, will invest ₹250 crore in a new wire-rod plant at Dahej in Gujarat.

The new facility with a capacity of 2.50 lakh tonnes will take the company’s total wire-rod production capacity to four lakh tonnes from the current 1.50 lakh tonnes.

Satish Pai, Managing Director, Hindalco Industries, told BusinessLine that the plant would start production by March 2018.

The investment is part of a strategy to enhance the contribution of value-added products to 60 per cent of overall sales from 40 per cent now, he said.

The recently commissioned wire-rod mill in Mahan pushed up copper value-added production by 80 per cent in June quarter, he added.

Going ahead, Pai said investments will be on the downstream side to enhance capacity and go higher up the value chain.

Every year the company will make one or two investments to increase capacity on the downstream side in both aluminium and copper. The time to set up these plants and payback is much faster, said Pai.

With all the investments in primary metal production, ramping up volume growth in aluminium and copper is expected to be more stable in the coming quarters.

On the company’s target to reduce debt, Pai said, “We have no worry on debt as most of them are long-term and there is no repayment schedule for next four years.”

With focus on value added products, Ebidta levels will go up and the target to bring net debt to Ebidta ratio below five is quite achievable, he said.

“We hear China has restarted four million tonne of aluminium production that was shut due to high production cost. It is a bit worrying, though we do not have firm numbers on this,” he said on price outlook.

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