The Hindu Business Line : Indal to go ahead with plans to strengthen operating base

CONSIDERING that both domestic and international aluminium markets will show positive signs of demand growth in the months ahead, Indian Aluminium Company Ltd (Indal), a wholly-owned subsidiary of the Aditya Birla group, has decided to move ahead with plans to strengthen its operating base through capacity expansion, mobilisation of key resources and improvement in product quality with wider range and applications.

Indal feels the surge in domestic economic growth should impact positively on aluminium consumption in the country primarily by end-use segments such as building, packaging and automobiles.

The first phase of policy initiatives with regard to expansion programme has been completed since Indal became a part of the Aditya Birla group. The policy forms part of a long-term strategy to improve the company's competitive positioning and launch Indal on a sustainable growth path. However, the second phase of expansion programme will be finalised shortly.

According to an Indal source, the alumina segment will attract top priority in its expansion plan.

In fact, this segment already registered its highest ever sales and profits with both price and volume driving the company's growth in top and bottom line.

The company's alumina refineries at Belgaum in Karnataka and Muri in Bihar clocked record production totalling about 4,92,000 tonnes in 2003-04 compared to the previous year's production of about 4,67,000 tonnes. Domestic sales of alumina at 1,25,561 tonnes were appreciably higher by 16 per cent compared to 1,08,086 tonnes. Overall export volumes rose four per cent at about 2,54,00 tonnes, reaching new global customers through direct marketing with successful inroads made into the US and Chinese markets.

The company's virgin metal production went up by 28 per cent to 65,000 tonnes (51,233 tonnes), on the back of a record output from its expanded Hirakud smelter in Orissa.

Both the sheet rolling plants at Belur in West Bengal and Taloja in Maharashtra together increased output by 21 per cent to 77,869 tonnes (64,505 tonnes) with higher efficiencies from Belur and better consumption norms.

Domestic sales volume at 49,167 tonnes was 29 per cent higher than the previous year (38,203 tonnes). A record 19,246 tonnes of sheet was exported, registering an increase of 19 per cent over the previous year (16,141 tonnes).

The company recorded a satisfactory performance in segments like extruded products despite the de-energisation of its Alupuram smelter in Kerala and consequent cost of freight on metals from Hirakud.

Since a strategy focussing on volume and value countered the external challenges of metal price hikes and capacity overhang in the domestic market, the annual output from the Alupuram extrusions unit was restricted to about 9,450 tonnes compared to about 9,800 tonnes last year.

Although domestic sales were a shade lower than last year at 8,526 tonnes (8,799 tonnes), the company managed to increase exports by 32 per cent at 999 tonnes (755 tonnes).