The Aditya Birla Group is on an investment spree. Its metals major, Hindalco, today announced ₹7,000 crore investments to double downstream capacity, days after the Group’s cement company UltraTech unveiled major capacity expansion plans.
Hindalco also announced a ₹730-crore investment in setting up a 34,000-tonne extrusion plant at Silvassa.
With signs of the economy looking up, the Aditya Birla Group has been one of the few corporates to revive investment plans. Last week, the group’s flagship UltraTech Cement announced investments of ₹5,477 crore to expand its capacity by 12.8 million tonnes per annum in the eastern, central and northern regions by the financial year 2022-23.
The new plant of Hindalco will service the fast-growing market for extruded aluminium products in the western and southern regions.
Satish Pai, Managing Director, Hindalco Industries, said with the revival in economy, the demand is picking in the automotive, building, construction sectors.
Over the next few years, as part of its downstream strategy, the company intends to raise capacity from 300,000 tonnes currently to over 600,000 tonnes with investments of about ₹7,000 crore, he said.
The focus on downstream assets is part of a sustainable business model with an emphasis on further de-risking the company’s business from LME volatility, he added.
The Silvassa facility will service customers faster, with an offering of high-quality aluminium products, he said.
The fully automated plant includes three extrusion presses and will enable Hindalco service premium customers in the building and construction, auto and transport, electrical, consumer and industrial goods sectors. Aluminium is becoming the preferred metal across sectors because of its recyclability.
The aluminium extrusion market in India is expected to grow from the current level of 3,73,000 tonnes to about 8,50,000 tonnes by 2030.
The western and southern regions account for over 60 per cent of the extrusion market. The existing extrusion plants in Renukoot in Uttar Pradesh and Alupuram in Kerala cater mainly to the auto, defence, aerospace and industrial segments. The Silvassa facility will add an additional 34,000-tonne capacity with a focus on the B&C segment that comprises over 60 per cent of the extrusion market, apart from auto, transport and other segments. Commercial production at the plant is expected to start in 24 months.