Hindalco Industries Limited, the Aditya Birla Group metals flagship, said it intends to set up a 34,000-tonne aluminium extrusion plant at Silvassa, the capital of Dadra & Nagar Haveli, at a cost of Rs 730 cr.
The new plant will service the fast-growing market for extruded aluminium products in the western and southern regions, particularly for the building and construction industry, the company said.
The term extrusion refers to the manufacturing of pipes and similar cylindrical objects.
The company said the Silvassa plant “signals a big step forward” in its strategy of diversifying into downstream products, instead of simply remaining a provider of metals to be used as raw material.
Hindalco already has a significant presence in the roofing market.
“The Company’s intent is to build a larger value-added product portfolio over the next few years. This investment indicates confidence in the economic revival, which in turn will grow the demand for downstream value-added products,” it said.
“Over the next few years, as part of our downstream strategy, we intend to enhance our capacity from over 300,000 tonnes currently, to more than 600,000 tonnes with investments of around ₹7,000 crore,” said Satish Pai, Managing Director, Hindalco Industries.
The move will also help cushion the company from the impact of sharp swings in international metal prices.
“Our focus on downstream assets is part of our Sustainable Business Model with an emphasis on further de-risking our business from LME volatility,” he said.
Hindalco currently has extrusion plants in Renukoot in Uttar Pradesh and Alupuram in Kerala, which 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 building and construction segment which comprises over 60% of the extrusion market, apart from auto, transport and other segments. Commercial production at the plant is expected to start in 24 months.
Pai said demand is picking in the building and construction and automotive sectors after the disruption caused by COVID-19 and the associated lock-downs.
“This has given us the confidence to move forward. The Silvassa facility will enable us to service our customers faster, with an offering of high-end quality aluminium products.”
The company claimed that the Silvassa plant will be the first of its kind in India in terms of technology.
The new plant will help cut down the fulfillment time for customers in this region, the company said.
“The fully automated plant includes three extrusion presses and will enable Hindalco to service premium customers in the building & construction, auto & transport, electrical, consumer and industrial goods sectors,” it said.
Several factors, including a shift towards electric vehicles and the easy recyclability of aluminium, is helping to drive demand for the metal.
“Aluminium is gaining ground as the preferred sustainable metal across these sectors as it is infinitely recyclable and enables industries to integrate circular economy models in their operations.”
The aluminium extrusion market in India is expected to grow exponentially – from the current level of around 373,000 tonnes to reach about 850,000 tonnes by 2030. Within this, the western and southern regions of the domestic market account for over 60% of the extrusion market.
$16.7 billion Hindalco Industries is the metals flagship company of the Aditya Birla Group, one of India’s top diversified business groups.
It is the world’s largest aluminium rolling and recycling company, and a major player in copper, and has 47 manufacturing units across 10 countries.
Its wholly-owned subsidiary Novelis Inc. is the world’s largest producer of aluminium beverage can stock and the largest recycler of used beverage cans (UBCs).