Introduction
Hindalco Industries
Limited, the metals flagship company of the Aditya Birla Group, is an industry
leader in aluminium and copper. A metals powerhouse with a consolidated
turnover of Rs. 72,078 crore (US$ 15.85 billion), Hindalco is the world’s
largest aluminium rolling company and one of the biggest producers of primary
aluminium in Asia. Its Copper smelter is the world’s largest custom smelter at
a single location.
Origin
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History
Hindalco embarked on its journey in 1958. Its first real
contribution to the vision of an industrial India occurred four years later,
when the visionary — late Mr. G.D. Birla set up India's first integrated
aluminium facility at Renukoot,
in the eastern fringe of Uttar Pradesh, India. It was backed by a captive
thermal power plant at Renusagar in 1967. Hindalco attained its leadership
position in the aluminium industry under the dynamic leadership of the late Mr.
Aditya Vikram Birla — a formidable force in the Indian industry.
And it was through the vision and guidance of Mr. Kumar
Mangalam Birla, the Group Chairman that the business segments of aluminium and
copper are consolidated to make Hindalco the non-ferrous metals powerhouse it
is today. This was achieved in part by expansion through mergers and
acquisitions with companies such as Indal and Birla Copper. Hindalco also
secured copper reserves and amplified its operating base by acquiring the
Australian Nifty and Mt. Gordon copper mines.
Over the years, Hindalco has grown into the largest
vertically integrated aluminium company in the country and among the largest
primary producers of aluminium in Asia. Its copper smelter is today the world's
largest custom smelter at a single location.
In 2007, the landmark acquisition of Novelis Inc., the
world's largest aluminium rolling company, placed Hindalco's footprint across
the globe, securing it a rank amongst the top five global aluminium majors and
also placing it in the Fortune 500 league.
Milestones
1958
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Incorporation of Hindalco Industries Limited.
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1962
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Commencement of production at Renukoot (UP) with an initial capacity
of 20,000 mtpa of aluminium metal and 40,000 mtpa of alumina.
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1965
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Downstream capacities commissioned (Rolling and extrusion mills at
Renukoot).
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1967
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Commissioning of Renusagar power plant – a strategic and farsighted
move.
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1991
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Beginning of major expansion programme.
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1994
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A huge expansion, modernization and diversification programme takes
off.
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1995
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Mr. Kumar Mangalam Birla takes over as chairman of the Indal Board.
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1998
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Foil plant at Silvassa goes on stream.
Hindalco attains ISO 14001 EMS certification. |
1999
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Aluminium alloy wheels production commenced at Silvassa.
Brownfield expansion of metal capacity at Renukoot to 242,000 tpa.
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2000
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Acquisition of controlling stake in Indian aluminium Company (Indal)
with 74.6 percent equity holding.
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2001
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Hindalco enters ‘The Asia Top 25’ list of the CFO Asia Annual Report
Survey, the only Indian company in 2001.
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2002
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Brownfield expansion at an outlay of Rs. 1,800 crore – ninth potline commissioned.
Buyback to equity shares to generate shareholder value and to utilize
surplus cash.
Major corporate restructuring to create a non-ferrous metal
powerhouse.
Amalgamation of Indo Gulf Corporation Ltd’s copper business, Birla
Copper, with Hindalco with effect from 1 April 2002.
Open offer to acquire additional equity to make Indal a wholly-owned
subsidiary.
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2003
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Hindalco acquires Nifty copper mine through Aditya Birla Minerals
Limited (ABML, formerly Birla Mineral Resources Pty Ltd.)
ABML acquires the Mt. Gordon Mines in November 2003.
Hindalco becomes majority stakeholder in Utkal Alumina, a joint
venture with Alcan.
The amalgamation of Indo-Gulf’s copper business with Hindalco becomes
effective from 12 February 2003.
Equity stake in Indal increased to 96.5 percent through an open
offer.
Divestment of 8.6 percent holding in Indo Gulf Fertilizers Ltd.
Brownfield expansion of aluminium smelter at Renukoot to 345,000 tpa.
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2004
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Scheme of arrangement announced to merge Indal with Hindalco.
Copper smelter expansion to 250,000 tpa.
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2005
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All businesses of Indal, except for the Kollur Foil plant in Andhra
Pradesh, merged with Hindalco Industries Ltd.
In September 2005, the company split its shares in a ratio of 10:1 to
enhance liquidity and encourage participation from retail investors.
Aditya Birla Group to set a world-class aluminium project in Orissa
at a project cost of about Rs. 11,000 Crore.
MoUs signed with state governments of Orissa and Jharkhand for
setting up greenfield alumina refining, smelting and power plants.
Commissioned Copper III expansion, taking total capacity to 500,000
tpa.
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2006
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Joint Venture with Almex USA for manufacture of high strength
aluminium alloys.
Signed an MOU with the government of Madhya Pradesh for a greenfield
aluminium smelter in Siddhi.
Hindalco completes the largest rights issues in the history of Indian
capital markets with a total size of Rs. 22,226 million.
Hindalco announces 10:1 stock split. Each share with face value of
Rs. 10 split into 10 shares of Rs. 1 each.
In May 2006, enters into a joint venture with Essar Power (M.P.) Ltd.
to develop and operate coal mines at Mahan, Madhya Pradesh.
The JV will supply coal to the proposed aluminium smelter and power
complex in Madhya Pradesh.
In May 2006, the company’s copper mining subsidiary, Aditya Birla
Minerals Limited (formerly Birla Mineral Resources Pty Ltd.) came out with an
equity offering and subsequent listing on the Australian Stock Exchange
(ASX).
In March 2006, acquired an aluminium rolling mill and wire rods
facility situated at Mouda (Nagpur), from Asset Reconstruction Company (India)
Ltd. (ARCIL), belonging to Pennar Aluminium Company Ltd.
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2007
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In May 2007, Novelis became a Hindalco Subsidiary with the completion
of the acquisition process. The transaction makes Hindalco the world’s
largest aluminium rolling company and one of the biggest producers of primary
aluminium in Asia.
Acquisition of Alcan’s 45 percent equity stake in the Utkal Alumina
project, makes Hindalco the 100 percent project owner.
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2008
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Alumina expansion at Muri.
Right issue: Raised a total of Rs. 4,426 crore for re-financing
bridge loan taken for Novelis acquisition.
Hindalco Almex Aerospace Limited (HAAL) facility became operational
and produced largest aluminium billet of 42” diameter.
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2009
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QIP: raised USD 600 million for projects, the largest straight QIP in
India.
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2011
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Refinance of Novelis debt of US$ 4 billion to lend strategic
flexibility to grow. This was a landmark innovation in financing, not only
did Hindalco get back 50 percent of
the invested equity within four years, but also opened up a novel funding
avenue between Novelis and Hindalco.
Achieved financial closure of two projects through debt financing –
Utkal Alumina for Rs. 4,906 crore and Mahan Aluminium for Rs. 7,875 crore.
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Vision, Mission and Values
Vision: To be a premium metals major, global in size
and reach, excelling in everything we do, and creating value for its
stakeholders.
Mission: To
relentlessly pursue the creation of superior shareholder value, by exceeding
customer expectation profitably, unleashing employee potential, while being a
responsible corporate citizen, adhering to our values.
Values: Integrity,
Commitment, Passion, Seamlessness and Speed
Awards and Recognitions
Hindalco has won several awards for community welfare,
environment protection, and also for quality and export performance.
- CII – EXIM Bank Business Excellence Award
- Greentech Safety Gold Award
- NIPM Gold Award for Best HR Practices
- Greentech Environment Excellence Gold Award
- The Golden Peacock Award for Corporate Social Responsibility
- Best Exporter Award
- National Energy Conservation Award
Products
Aluminium business
- Primary aluminium
- Aluminium extrusions
- Aluminium rolled products
- Aluminium foil and packaging
- Alumina chemicals
Copper business
- Copper cathodes
- Continuous cast copper rods
- Precious metals
- Fertilisers
- Acids
Market Share (Domestic)
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Capacity
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Aluminium business
Alumina chemicals - 1.50 million tpa
Primary aluminium - 506,400 tpa
Aluminium extrusions - 31,000 tpa
Aluminium rolled products - 205,000 tpa
Aluminium foil and packaging - 40,000 tpa
Copper business
Copper Cathodes - 500,000 tpa
Continuous Cast Copper Rods -
142,200 tpa
Sulphuric Acid - 16,70,000 tpa
Phosphoric Acid - 180,000 tpa
DAP & Complexes - 400,000 tpa
Gold - 15 tpa
Silver - 150 tpa
Plant Location
Aluminium Business
Refineries
Renukoot 700,000 tpa
Belgaum 350,000 tpa
Muri 450,000 tpa
Bauxite Reserves
JHARKHAND
Lohardaga/Gumla
MAHARASHTRA
Durgmanwadi/Chandgad
ODISHA
Maliparbat
CHATTISGARH
Samri
Smelters
Renukoot 345,000 tpa
Hirakud 161,400 tpa
Conductor Redraw Plants
Renukoot 56,400 tpa
Captive Power Plants
Renusagar 742 MW
Hirakud 367 MW
Coal Mine
Talabira
Sheet Rolling Plants
Renukoot 80,000 tpa
Belur 45,000 tpa
Taloja 50,000 tpa
Mauda 30,000 tpa
Extrusion Plants
Renukoot 23,000 tpa
Alupuram 8,000 tpa
Foil Plants
Silvassa 30,000 tpa
Kollur 4,000 tpa
Kalwa 6,000 tpa
Copper Business
Mines (Australia)
Nifty
Mount Gordon
Integrated
facility
Dahej, Gujarat
Manpower and Organizational Structure
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Hindalco has a pool of around 19,300 employees in their fold. Hindalco’s management team
consists of experienced individuals with strong credentials.
Board of Directors
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Mr. Kumar Mangalam Birla, Chairman
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Mrs. Rajashree Birla
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Mr. C. M. Maniar
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Mr. M. M. Bhagat
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Mr. K. N. Bhandari
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Mr. A. K. Agarwala
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Mr. N. J. Jhaveri
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Mr. Ram Charan
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Mr. Jagdish Khattar
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Mr. D. Bhattacharya, Managing Director
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Mr. M. Damodaran
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Chief Financial Officer
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Mr. Praveen Maheshwari
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Head – Corporate Projects & Procurement Cell
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Mr. B.B Jha
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Company Secretary
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Mr. Anil Malik
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Chief People Officer
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Mr. Vineet Kaul
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Business / Unit Head
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Mr. Dilip Gaur, Group Executive President, Copper
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Mr. Sachin Satpute, Chief Marketing Officer, Aluminium
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Mr. Satish M Bhatia, President, Foil and Packaging
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Mr. R. S. Dhulkhed, Senior President, Operations
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Mr. Sanjay Sehgal, President, Chemicals & Intl.
Trade
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Mr. D. K. Kohly, Chief Officer Operations, Renukoot Unit
& Renusagar Units
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Utkal Alumina International Ltd
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Mr. Suryakant Mishra, CEO
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Novelis Inc.
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Mr. Philip Martens, President and Chief Executive
Officer
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Aditya Birla Minerals Limited
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Mr. D. Bhattacharya, Chairman
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Mr. Sunil Kulwal, CEO and MD
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Mr. Peter Torre, Company Secretary
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Financial Performance
Corporate Social Responsibility
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Long
before corporate social responsibility found a place in the corporate lexicon,
it was already textured into the Group's value system. As early as the 1940s,
the late Mr. G.D. Birla espoused the trusteeship concept of management —
investing a portion of the company's profits for the larger good of society.
The late Mr. Aditya Birla went beyond chequebook philanthropy when he brought
in the concept of 'sustainable livelihood'.
For over
50 years, Hindalco has worked in the hinterlands of India to better the quality
of life of the underprivileged sections of society.
Today, we reach out to millions of people in the villages, of whom more than 60
per cent live below the poverty line. Their needs include: access to water,
agriculture and sustainable livelihood, healthcare, and education. These four
areas form the focus of our efforts.
The company also works to bring about social reform through widow re-marriage
and dowerless marriages.
We work in partnership with government agencies and the beneficiaries to
provide these necessities and encourage social reform.
Focus areas
Health care
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Medical camps: Taking mobile
medical units and providing ambulance service to remote areas.
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Health facilities: Setting up
well-equipped and professionally manned health centres at several locations.
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Regular health camps: Providing family
planning, mother and child care and specialised camps for eye care and for
cataract; coordinating regular pulse polio immunisation drives; and promoting
the awareness, prevention and treatment of malaria, water-borne diseases, TB,
HIV/AIDS, and others diseases.
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Education
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Balwadis: Providing for the
primary education of underprivileged children.
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Adult literacy: Providing formal
and informal classes and active support to the government's mission to
improve rural literacy levels.
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Merit scholarships / Schemes: Support female students for educational endeavours.
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Educational support: Contributing
uniforms, textbooks and classroom equipment and undertaking school building
construction and maintenance.
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Skills training / capacity building
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The Aditya Birla Rural Technology Park (Muirpur, Uttar
Pradesh, India): Runs over 70 training programmes in
diesel / hand pump repair / maintenance, electrical repair/maintenance,
bee-keeping, tailoring, knitting and agriculture-related programmes and
encouraging self-employment through income-generating projects.
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The Yashogami Skills Training Centre (Radhanagari,
Tarale, Maharashtra, India): Trains women in
skills such as rexine handicraft, fashion design, tailoring, food processing,
pottery, lamination, electronics assembly, zardozi, jewellery design, papier
mache, rangolli, and fabric design.
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Women's empowerment
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Self-Help Groups (SHG): These
programmes involve over 11,000 women from rural communities around Hindalco
units.
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SHG activities: Micro credit and
micro finance schemes, entrepreneurship building, oil-processing units,
tailoring centres, horticulture and nutrition gardens, diesel and hand pump
repair, vermi compost production, mushroom cultivation, food processing, etc.
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Awareness building: Health and
sanitation, family planning, literacy drives and microfinance; facilitating
government loans for small-scale enterprise and rural insurance schemes, etc.
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Social causes: Promoting
dowerless marriages and widow re-marriages.
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Agricultural support
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Irrigation schemes: Land brought
under irrigation with better yield and multi-cropping methods.
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Watershed development: Hydel towers,
drainage canals, wells, check-dams, pedal pumps and harvest tanks.
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Training: Field schools
train local farmers in modern agricultural techniques for higher crop yield;
introducing lac cultivation, post-harvest technology with safe grain storage
through an integrated pest-management system, floriculture, horticulture and
kitchen gardens; shifting from mono to multi cropping patterns and
distribution of high-yield seeds.
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Measures taken for energy or
water conservation
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Protecting the
environment is central to our business. We make significant investments in
environment management and are committed to continually strengthen our energy
efficiency and environmental performance in order to achieve sustainable
development.
Attesting our environmental credentials are the numerous awards our units have
won for energy conservation, environment and safety. To be sure, good
environment management makes sound business sense.
Hindalco’s
proactive initiatives include
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Choosing the right technology for our greenfield
projects to ensure energy efficiency.
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Enhancing material efficiency, process / equipment
productivity backed by pollution prevention practices and adoption of cleaner
technologies for brownfield projects.
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Waste Management System for systematic collection of
scrap and safe storage / disposal and re-use of wastes.
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Continuous efforts to conserve resources, minimise and
recycle wastes.
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Controlling emissions through dry scrubbing and
electrostatic precipitators and discharge through appropriate effluent
treatment plants.
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Rehabilitation through afforestation of mined areas and
rehabilitation of waste disposal sites by greening, e.g. fly ash mound and
abandoned red mud dump.
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Promoting industrial recycling of waste like spent pot
lining, fly ash, spent caustic, etc.
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Observations
- Indian aluminum producers are among the lowest cost producers of the white metal in the world, due to availability of high quality bauxite, relatively low energy cost, thanks to captive power, and cheaper labour. The average cost of production for an Indian integrated aluminum maker is about $1,700 a tonne, which is at least $300 lower than the global average.
- Hindalco has been pursuing a clear strategy of dominating the primary aluminium space through its operations in India while allowing its international subsidiary, Novelis, to focus on making high value products.
- Hindalco Industries is on an aggressive drive to raise funds for its biggest greenfield project in Odisha. The country's largest non-ferrous metals producer plans to tap about Rs 9,000 crore for the project, which is being re-configured mirroring the ambitions of its peer, Anil Agarwal's Vedanta Aluminium.
- Coal is not available locally and Hindalco is settting up 5 large projects in the metals space. The central government is close to according environmental approval for the group's Mahan coal project which will smoothen supplies of coal for the group.
Suggestions
- Hindalco has reached the peak of its current capacity and growth will only come from new capacities. The company’s three greenfield projects — Mahan smelter, Utkal alumina refinery and Aditya smelter — have already seen delays of 9-15 months. The company should endevour to complete these projects at the earliest to prevent further fall in its share prices.
- Hindalco, should sharp its focus on value-added products such as aluminium-based windows, door systems and building facades, as part of efforts to create new markets for the metal in India.
- Hindalco should assist various original equipment manufacturers in developing innovative products in the automobiles, consumer durables and other emerging areas.
- Studies have estimated that fuel savings per 100 km for a 100 kg weight reduction in vehicles could range from 0.15 to 1 lt.
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References
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- http://www.bazaartrend.com/
- http://business.mapsofindia.com/
- http://www.business-standard.com/
- http://economictimes.indiatimes.com/
- http://www.hindalco.com/
- http://www.wikipedia.org/
Kiran
Roll No.76
IM-19, Section B
